Section 12 of Finance Act 2012 introduced the Foreign Earnings Deduction (FED), which provides for a limited tax deduction for individuals who temporarily carry out the duties of their office or employment in Brazil, Russia, India, China or South Africa. The provision applies as respects the years 2012, 2013 and 2014. The scheme was extended in Finance Act 2013 to include travel to Nigeria, Senegal, Algeria, Egypt, Ghana, the Democratic Republic of Congo, Kenya and Tanzania for 2013 and 2014.
Following a comprehensive review of the scheme in 2014, a number of amendments were made in the 2014 Finance Act. The scheme was extended up to and including 2017 and changes were made to the qualifying criteria for the scheme. In addition, with effect from 1 January 2015, the number of states was also extended to include Japan, Singapore, South Korea, Saudi Arabia, the United Arab Emirates, Qatar, Bahrain, Indonesia, Vietnam, Thailand, Chile, Oman, Kuwait, Mexico, and Malaysia in line with the Government's Trade, Tourism and Investment Strategy.
The latest details of tax claims in respect of Foreign Earnings Deduction for 2012 and 2013 are as shown in the following table.
Complete information in relation to the 2014 returns is not yet available as the relevant Form 11 tax returns are not due to be filed until later this year.
|
Country
|
Estimated Tax Cost €
|
|
Number of Claims
|
|
|
|
2012
|
2013
|
2012
|
2013
|
|
Brazil
|
45,436
|
70,198
|
7
|
10
|
|
China
|
186,104
|
216,141
|
29
|
32
|
|
India
|
77,873
|
104,901
|
11
|
12
|
|
Russia
|
120,889
|
57,588
|
13
|
8
|
|
South Africa
|
156,899
|
159,152
|
19
|
19
|
|
Other Countries* and Claimants that visited and claimed for more than one country in 2013
|
54,157
|
313,777
|
10
|
38
|
|
TOTAL
|
641,358
|
921,757
|
89
|
119
|
*Other countries include Congo, Egypt, Ghana, Nigeria, Senegal and Tanzania.
Having regard to the Revenue Commissioners' obligation to observe confidentiality in relation to the tax affairs of individual taxpayers and small groups of taxpayers, as provided for in Section 851A of the Taxes Consolidation Act 1997, Revenue cannot provide any information regarding the names of the companies and/or of the work carried out in each respect of each claim.
As outlined earlier, the scheme was amended to align with the Government's Trade, Tourism and Investment strategy. In my view, it would not be appropriate to apply some type of human rights safeguards to the application of tax relief designed to boost trade. However, it is unclear what the Deputy has in mind regarding such safeguards.
