823A Deduction for income earned in certain foreign states

Summary

This section provides for relief from income tax for the years of assessment 2012 to 2030 for individuals who are resident in the State but who temporarily carry out the duties of their office or employment in certain relevant states.

The relief does not apply to Universal Social Charge and PRSI.

Details

Definitions

(1) “qualifying day” means a day the whole of which is spent in a relevant state for the purpose of the performance of the duties of a relevant office or employment.

For the years 2012 to 2014, a “qualifying day” must be one of at least four consecutive days, spent in a relevant state, substantially devoted to the performance of duties. No day will be counted more than once.

For the years 2015 to 2025, a “qualifying day” must be one of at least three consecutive days, spent in a relevant state, substantially devoted to the performance of duties. No day will be counted more than once. Additionally, for the years 2015 to 2025, time spent travelling from Ireland to a relevant state, between relevant states or from a relevant state to Ireland is deemed to be time spent in a relevant state.

For the years 2025 to 2030, a “qualifying day” means a day which is one throughout the whole of which the individual is present in a relevant state for the purposes of the performance of the duties of the office or employment and where such day is substantially devoted to the performance of these duties.

In respect of all these years of assessment, a “qualifying day” shall not be counted more than once as a “qualifying day” and presence in a relevant state shall include the duration of time spent travelling directly from the State to a relevant state, and from a relevant state to the State or to another relevant state.

With respect to the 2026 to the 2030 years of assessment, a day shall not be treated as a “qualifying day” unless the presence in the relevant state is “reasonably required” for the purposes of the performance of the duties of the office or employment. The test is objective in nature and provides that a day in a relevant state will qualify if the presence in the relevant state is reasonably required in order to perform their work duties, but not where the employee or office holder merely chooses, for personal reasons, to spend time working in a relevant state. However, a day shall not be precluded from being treated as a “qualifying day” solely because the individual could have performed the duties of the office or employment in Ireland. This provision is included in the definition on the basis that a restrictive interpretation of the term “reasonably required” could prevent the day from qualifying if the duties performed abroad could have been performed remotely from Ireland, i.e., through an online meeting.

“relevant office or employment” means an office or employment part of the duties of which are performed in a relevant state on a qualifying day;

“relevant period” means, in relation to a year of assessment, a continuous period of 12 months part only of which is in the year of assessment;

“relevant state” means:

• as regards the tax years 2012 to 2025, Russia,
• as regards the tax years 2012 to 2030, Brazil, India, China or South Africa,
• as regards the tax years 2013 to 2030, Egypt, Algeria, Senegal, Tanzania, Kenya, Nigeria, Ghana and the Democratic Republic of the Congo,
• as regards the tax years 2015 to 2030, Japan, Singapore, Korea, Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Indonesia, Vietnam, Thailand, Chile, Oman, Kuwait, Mexico and Malaysia,
• as regards the tax years 2017 to 2030, Colombia and Pakistan, and

as regards the tax years 2026 to 2030, Philippines and Türkiye;

“the specified amount” means an amount determined by the formula-

where-

D is the number of qualifying days in a year of assessment in relation to the individual claiming the relief,

E is the income in the tax year from a relevant office or employment, and includes so much of any gain realised by the exercise, assignment or release of a right obtained by the individual as an office holder or employee in the relevant office or employment, after deducting any contribution or qualifying pension premium but excluding the amount of-

1. any benefit in kind under general BIK provisions,
2. any benefit in kind arising by virtue of a car being made available by reason of the employment,
3. any benefit in respect of a preferential loan,
4. any gratuitous lump sum termination payments,
5. any payments under restrictive covenants,

and

F is the total number of days in the tax year that the individual held a relevant office or employment.

(2)(a) The relief applies to all directors and employees in the private sector and to those employed in the commercial semi-State sector. It does not apply to those working in the Civil and Public service.

Non-qualifying income

(2)(b) The relief is not available in respect of income from an office or employment which is chargeable to tax on the remittance basis or in respect of income to which:

• section 472D applies (Research and Development credit),
• section 822 applies (Split year treatment),
• section 825A applies (Transborder Workers’ Relief), or
• section 825C applies (Special Assignee Relief Programme).

(3) Relief is granted under this section on foot of a claim from a taxpayer who is resident in the State by providing a proportional tax deduction based on the number of qualifying days worked in relevant states. The maximum amount that can be deducted in the tax years 2012 to 2025 is €35,000. As regards the tax years 2026 to 2030, the maximum amount that can be deducted is €50,000.

For the years 2012 to 2014, a claimant must have worked at least 60 qualifying days in a twelve-month period, part or all of which is in the tax year to which the claim relates. For the years 2015 to 2016, the qualifying days requirement in a continuous period of 12 months is reduced from 60 to 40. For the years 2017 to 2030 the qualifying days requirement in a continuous period of 12 months is reduced from 40 to 30.

Where an individual has more than one office or employment, the minimum number of qualifying days requirement can include qualifying days from all such offices or employments.

(4) The amount of income, profits or gains arising to the individual from a relevant office or employment does not include amounts in respect of expenses paid or recouped by the claimant.

(5) Where an individual is entitled to relief for tax paid in a relevant state, the specified amount is reduced by an amount equal to the amount of income on which such tax was paid.

Relevant Date: Finance Act 2025