Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

A deduction, as has just been described, provides relief from income tax on up to €35,000 for employees who are tax resident in Ireland but travel out of the State to temporarily carry out duties of their office or employment in certain qualifying countries. In this way, it acts as incentive to Irish businesses seeking to develop and expand into emerging markets in any of the 30 qualifying countries. In order to qualify for this deduction, an employee must spend a minimum of 30 days abroad in a continuous 12-month period and each trip must consist of at least three consecutive days substantially devoted to the performance of duties in a qualifying country.

The incentive had a cost of approximately €5 million in 2019, the most recent year for which Revenue data are available. The scheme was last examined in 2019 when an independent review recommended an extension to the end of 2024. The review stated that the policy objective of assisting firms in Ireland to diversify their exports remained valid. Given the impact of Brexit, the impact of which is still being felt and may grow in the future, the review found that this measure was even more relevant to Ireland than it had been when the scheme was first introduced.

With regard to the qualifying criteria referenced in the Deputy's amendment, it should be noted that section 823(1)(a) of the Taxes Consolidation Act 1997 for state aid reasons does not specify particular activities to be performed to avail of the relief. Sector-specific reliefs, as a general rule, are subject to more onerous state aid requirements. It should also be noted that Revenue statistics on the measure are published on its website annually.

As the extension is due to come to an end at the end of 2024, decisions on the scheme will no doubt be considered in the coming 12 to 18 months. I expect that this will lead to a further review of and inquiry into the scheme. For that reason, the amendment proposed by Deputy Doherty this evening is not needed or merited in the Bill.

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