Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I move amendment No. 13:

In page 22, between lines 26 and 27, to insert the following: "Report on the Foreign Earnings Deduction

14.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the Foreign Earnings Deduction, the extent to which the relief has achieved its policy objectives and to review its qualifying criteria to ensure it achieves its policy objectives.".

This relates to the foreign earnings deduction. It is timely to examine how it is operating and the extent to which it has achieved its policy objectives, and to review the qualifying criteria to ensure those objectives are achieved. The relief from income tax is available on salaries up to €35,000 for tax-resident employees in Ireland who travel outside the State temporarily to carry out the duties of their office or employment in certain qualifying countries. The amendment would extend the deadline for this for a further three years.

I support the intention behind this, which is to help companies to expand their exports into new markets. The qualifying criteria are that an employee must spend a minimum of 30 days abroad in a year and each trip must consist of at least three consecutive days in a qualifying country. The employee must work a number of qualifying days during the tax year or a continuous 12-month period.

The policy objective is to support efforts by firms to expand into growing markets by incentivising their employees to undertake marketing trips to them. However, the relief does not specify the type of work to be carried out in those markets. In fact, there is no legislative requirement for an employee to be engaged in any export-related activity whatsoever, meaning it is possible for an employee to perform duties on a foreign earnings deduction assignment that could be carried out in the State. I agree with the policy intention of the scheme but how we all do our business is changing. There is a requirement to examine the qualifying criteria to ensure that if they need to be tightened, they will be and that the deduction will be available for activity that needs to be done outside the State, is export related and could not be carried out within the State. I refer to someone travelling outside the State to one of the markets concerned and availing of the relief although the criteria could be met in Dublin, Cork, Donegal or elsewhere in the State. Has the Minister considered amending the legislation and qualifying criteria to address this? That is the intention of the amendment.