Foreign Earnings Deduction - IT34


For the tax years 2012, 2013 and 2014, employees who carry out part of the duties of their employment in Brazil, Russia, India, China or South Africa (each of these countries is known as a "relevant state") may claim a tax deduction known as the Foreign Earnings Deduction.

The relief is also available for the years of assessment 2013 and 2014 for resident individuals who spend significant amounts of time working in Egypt, Algeria, Senegal, Tanzania, Kenya, Nigeria, Ghana or the Democratic Republic of the Congo.

Qualifying conditions

The basic condition is that, within a period of 12 months (part of which is in the tax year to which the claim relates), the employee has worked in one or more of the relevant states for a minimum period of 60 "qualifying days".

A "qualifying day" is a day on or after 1 January 2012 that is one of at least 4 consecutive days devoted substantially to carrying out the duties of the relevant employment where, throughout the whole of each such day, the individual is present in a "relevant state".

Saturdays, Sundays and public holidays, throughout the whole of which the individual is present in a "relevant state" and which form an unavoidable part of a business trip to a "relevant state", may be counted as “qualifying days”.

Days spent travelling to and from a "relevant state" where the individual is not present for the whole of the day in a "relevant state" may not be counted. However, days spent in uninterrupted travel between "relevant states" may be counted as qualifying days.

The deduction

The amount of the deduction (i.e. the amount of income from the employment that may be relieved from tax) is the lesser of -

  1. the "specified amount" (see below); or
  2. €35,000.

The specified amount

The "specified amount" is calculated by using the formula
D x E / F

  • D is the number of "qualifying days" worked in a " relevant state" in the tax year;
  • E is all the income from the employment in the tax year (including any taxable share options derived from the employment less any qualifying pension premium but excluding tax deductible expenses payments, benefits in kind, termination payments and payments payable under restrictive covenants);
  • F is the total number of days that the relevant employment is held in the tax year (365 days in a full tax year).

Note: The "specified amount" is reduced by the amount of any income earned on qualifying days in respect of which double taxation relief is available in this State under a Tax Treaty.


Tom is required by his employer to travel to Russia to seek new markets for his employer’s goods. He arrives in Russia at 10 p.m. on 10 January 2012 and works there until he departs on12 April 2012 at 8 a.m. His salary is €160,000.

Tom spends 92 qualifying days in Russia (21 in January, 29 in February, 31 in March and 11 in April). Days of arrival and departure are not counted as qualifying days as he is not present in Russia for the whole of these days.

The specified amount is, therefore, the lesser of -

  1. €35,000; or
  2. the amount calculated by the formula -
        92 days / 365 days x €160,000 = €40,328 

As €35,000 is the lesser amount, Tom is entitled to reduce, for tax purposes, his salary from €160,000 to €125,000.


The Foreign Earnings Deduction does not apply to public servants nor does it apply to income -

  • from an employment to which the remittance basis of taxation applies
  • to which the key employee research and development tax relief applies
  • to which the "split year" residence rules applies
  • to which the cross border worker relief applies; or
  • to which relief under the new special assignee relief programme (SARP) applies.


Since the amount of any deduction will depend on the number of qualifying days absence in either a tax year or in a period of 12 months straddling two tax years, the deduction will be given by way of end of year review. Claims should be supported by a statement from the employer indicating the dates of departure and return to the State of the employee and the location at which the duties of the office or employment were performed while abroad.

Further Information

If you need further information contact your Regional Revenue office whose LoCall number is listed below (within the Republic of Ireland only).

LoCall numbers of the Regional Offices
Region Area Covered Telephone No.
Border Midlands West Region Cavan, Monaghan, Donegal, Mayo, Galway, Leitrim, Longford, Louth, Offaly, Roscommon, Sligo, Westmeath 1890 777 425
Dublin Region Dublin (City and County) 1890 333 425
East & South East Region Carlow, Kildare, Kilkenny, Laois, Meath, Tipperary, Waterford, Wexford, Wicklow 1890 444 425
South West Region Clare, Cork, Kerry, Limerick 1890 222 425

If calling from outside the Republic of Ireland phone + 353 1 702 3011.

Please note that the rates charged for the use of 1890 (LoCall) numbers may vary among different service providers.

Time Limit for Repayment 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.

Accessibility - If you are a person with a disability and require this leaflet in an alternative format the Revenue Access Officer can be contacted at

pdfPDF Version of IT34 - Foreign Earnings Deduction (PDF, 974KB)

This leaflet is intended to describe the subject in general terms. As such, it does not attempt to cover every issue which may arise in relation to the subject. It does not purport to be a legal interpretation of the statutory provisions and consequently, responsibility cannot be accepted for any liability incurred or loss suffered as a result of relying on any matter published herein.

May 2014

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