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Foreign Earnings Deduction (FED)

Have you claimed FED for the last few years and saved up to €57,050 in income tax?

FED is an attractive tax relief available to employees and directors of Irish companies, who spend time working in certain overseas locations (see qualifying countries table below). FED was introduced as an incentive to Irish businesses seeking to develop and expand into emerging overseas markets.

The relief was introduced in Finance Act 2012, and was enhanced further in subsequent Finance Acts i.e. the conditions for determining a qualifying day were relaxed and the list of qualifying countries was expanded. The relief is available from 2012 until 31 December 2022.

FED operates by means of a deduction from taxable employment income and is calculated using the formula outlined below. There are a number of qualifying conditions attached to the relief, which are outlined in the table below by reference to the relevant tax years.

Qualifying conditions


2012 to 2014

2015 to 2016

2017 to 2022

Minimum number of qualifying days (in a tax year or 12 month period)




Qualifying day

At least four consecutive days.

At least three consecutive days.


Day of arrival and departure not included. Days spent in uninterrupted travel between relevant countries can be included.

Includes Saturdays, Sundays and public holidays, may be counted.

Time spent travelling to/from Ireland to/from a relevant country is deemed to be time spent in a relevant country.

Relief is granted against income tax only i.e. relief against the USC/PRSI not available; and

Certain other reliefs cannot be claimed simultaneously (e.g. SARP, Cross Border Workers Relief)

Qualifying countries

2012 to 2022

Brazil, China, India, Russia and South Africa

2013 to 2022 (Additional countries)

Algeria, Democratic Republic of Congo, Egypt, Ghana, Kenya, Nigeria, Senegal and Tanzania

2015 to 2022 (Additional countries)

Kuwait, Malaysia, Mexico, Oman, Qatar, Saudi Arabia, Singapore, South Korea, Thailand, United Arab Emirates and Vietnam

2017 to 2022 (Additional countries)

Columbia and Pakistan

The relief is restricted to the lesser of:
€35,000; or
the “specified amount”.

The specified amount is calculated using the formula:
D x E/F where:

D = number of “qualifying days” worked in a “relevant state” in the tax year.
E = total employment income for the tax year (including taxable benefits in kind).
F = total number of days that the relevant employment is held in the tax year (365 if a full year).

The “specified amount” is reduced by the amount of any employment income related to foreign duties in respect of which double taxation relief is available in Ireland under a double taxation agreement.

The relief is claimed via an individual’s annual tax return. 

A relevant employee, earns €100,000 and spends 125 qualifying days working between South Africa, Egypt and Nigeria in 2015. The relief available is calculated as follows:

Deduction from taxable income: €100,000 x 125/365 = €34,246

The value of the relief, calculated at the employee’s marginal rate is: €34,246 x 40% = €13,699

Time limit for claims

A claim for repayment of tax must be made within four years after the end of the tax year to which the claim relates e.g. a claim for relief for the 2016 tax year must be made by 31 December 2020.