Foreign Earnings Deduction (FED)

  1. Overview
  2. Who qualifies for FED?
  3. How much allowance can you claim?
  4. How do you apply for FED?

How much allowance can you claim?

The amount of the allowance due is less than or equal to €35,000 or the specified amount.

The specified amount is calculated using D x E / F.

  • D is the number of qualifying days worked in a relevant state during the tax year
  • E is all the income received from the employment in the tax year. This includes any taxable gain realised by share options less any qualifying pension contribution or premium. It excludes allowable expenses payments, Benefits in Kind (BIK), termination and restrictive covenants payments.
  • F is the total number of days that the employment is held by you in the tax year (there are 365 days in a full tax year).

The specified amount is reduced by your income earned on qualifying days for which Double Taxation Relief is available under a tax treaty. 

Examples 1 and 2 below show how FED is calculated.

Next: How do you apply for FED?