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

The FED provides relief from income tax on up to €35,000 for employees who are tax resident in Ireland but travel out of the State temporarily to carry out duties of their office or employment in certain qualifying countries. In this way, FED acts as an incentive to Irish businesses seeking to develop and expand into emerging markets in any of the 30 qualifying countries. To qualify for FED, 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 has a relatively modest cost, around €5 million in 2019, the most recent year for which Revenue data are available.

FED was last examined in 2019, where the independent review recommended an extension out to the end of 2024. The review stated that the policy objective of assisting firms in Ireland to diversify their exports remained valid and that, given the impact of Brexit, the measure was even more relevant to Ireland than when it was introduced. On the qualifying criteria referenced in the Senator’s recommendation, it should be noted that section 823A of the Taxes Consolidation Act 1997 does not specify particular activities to be performed to avail of the relief. This is because 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 the Revenue website annually. In these circumstances, therefore, I do not propose to accept the Senator's recommendation.