Double taxation relief

If you’re liable to tax in more than one country, you may be able to claim double taxation relief. Ireland has tax treaties with 73 countries and the agreements cover direct taxes such as:

• Income Tax
• Universal Social Charge
• Corporation Tax
• Capital Gains Tax

If Ireland doesn’t have an agreement with the other country or the agreement doesn’t cover a specific tax, the taxes consolidation act 1997 provides for unilateral relief against double taxation in relation to certain types of income and gains.

This includes:

• Dividends from foreign subsidiaries
• Foreign branch profits
• Foreign interest and royalties
• Leasing income
• Capital gains on foreign assets

Ireland currently has signed comprehensive double taxation agreements with 74 countries, 73 of which are currently in effect:

Tax agreements currently under negotiation 

• A new DTA between Ireland and the Netherlands entered in force on 29 February 2020. The new DTA will replace the existing DTA between Ireland and the Netherlands on its entry into effect.
• Ireland has completed the ratification procedures to bring the Protocol to the existing Agreement with Switzerland into force. The protocol was ratified by Finance Act 2019.
• Ireland has completed the ratification procedures to bring the Protocol to the existing Agreement with Belgium into force. The Protocol entered into force on 14 May 2019.
• Negotiations have concluded for new Double Taxation Agreements with:
  • Kenya
  • Kosovo
  • Oman
  • Germany, Guernsey, Isle of Man and Mexico

• In addition to the negotiation of new treaties, Ireland’s existing treaty base will also be updated to incorporate provisions under the Multilateral Convention to Implement Tax Treaty-Related Measures to Prevent BEPS (MLI)

Where Ireland doesn’t have a double taxation agreement with a particular country or a double taxation agreement doesn’t cover a particular tax, the Taxes Consolidation Act 1997 (TCA 1997) provides unilateral relief against double taxation in respect of certain types of income and gains:

• Dividends from foreign subsidiaries
• Foreign branch profits
• Foreign interest and royalties
• Leasing income
• Capital gains on foreign assets.

There are also reliefs under:

• EU "Parent-Subsidiaries Directive" (90/435/EEC) (section 831 TCA 1997).
• EU "Interest and Royalties Directive" (2003/49/EC) (section 267G-L TCA 1997).
• EU ''Mergers Directive" (90/434/EEC) (sections 630-638 TCA 1997).

Transborder Workers’ Relief

This is for people resident in Ireland but who work and pay tax in another country. You can claim it if you travel daily or weekly to your place of work outside Ireland and you'll only pay tax in Ireland on any income you earn in Ireland. To qualify you must:

• be a tax resident in Ireland
• work in a country that has a double taxation agreement with Ireland
• have paid tax in the other country and are not due a refund of the tax
• be present in Ireland for at least one day every week you work abroad

The employment must be held for a continuous period of 13 weeks in the year.

You can't claim this relief if you receive Seafarers' Allowance, Foreign Earnings Deduction (FED) or Split-Year treatment. You can't claim relief if your spouse/civil partner is a proprietary director of the company you work for abroad.

You must apply in writing to Revenue for this relief. In your application, you must include a final statement of Income Tax (IT) liability from the other country.

Foreign Earnings Deduction (FED)

If you’re resident in Ireland for tax purposes but work abroad throughout the year, you may be able to claim FED.

Conditions to qualify

1. You must work in a relevant state during a tax year or continuous 12-month period spanning 2 years for:

• at least 60 qualifying days in 2012, 2013 and 2014
• at least 40 qualifying days in 2015 and 2016
• at least 30 qualifying days from 2017 to 2025

Relevant state

Brazil, Russia, India, China and South Africa and:

 From 1 January 2013:

• Egypt
• Algeria
• Senegal
• Tanzania
• Kenya
• Nigeria
• Ghana
• Democratic Republic of the Congo

From 1 January 2015:

• Qatar
• Bahrain
• Malaysia
• Indonesia
• Vietnam
• Thailand
• Chile
• Oman
• Kuwait
• Japan
• Singapore
• Republic of Korea
• Saudi Arabia
• United Arab Emirates
• Mexico

From 1 January 2017:

• Colombia
• Pakistan

Qualifying days

From 2012 to 2014 a qualifying day is 1 of at least 4 consecutive days working in a relevant state.

From 2015 to 2025 a qualifying day is 1 of at least 3 consecutive days in a relevant state.

Time spent travelling from Ireland to a relevant state or from a relevant state to Ireland or to another relevant state is deemed to be time spent in a relevant state. This means that the day of arrival in the relevant state can be counted, provided the individual left Ireland the previous day and the day of departure from the relevant state can be counted, provided the individual does not arrive back in Ireland until the following day.

Time spent travelling is counted as a qualifying day if you travel:

• from Ireland to a relevant state
• from a relevant state to Ireland
• from one relevant state to another

Saturdays, Sundays, and public holidays can be counted as qualifying days in a relevant state.

How much can I claim?

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= number of qualifying days worked in a relevant state during the tax year
• E= income from the employment in the tax year, including taxable share options less any qualifying pension premium. Excludes allowable expenses payments, Benefits in Kind (BIK), termination and restrictive covenants payments
• F= number of days the employment is held in the 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.

You can’t claim this deduction if you:

• are taxed using Split-Year residence
• receive Transborder Workers’ Relief 
• receive relief under the Special Assignee Relief Programme
• are a civil/public servant
• receive key employee research and development relief

The relief is not available in respect of income from an office or employment that is chargeable on the remittance basis or in respect of income to which the following sections of the Taxes Consolidation Act 1997 apply:

• 472D (Research and Development credit)
• 822 (Split year residence treatment)
• 825A (Relief for income earned outside the State)

and

• 825C (Special Assignee Relief Programme)

How do I apply for FED?

You can apply for the deduction at the end of the tax year. In writing with a statement from your employer with details of:

• Departure and return dates to Ireland
• Location where you worked abroad

You must claim the relief within four years.