Extension to SARP welcome development
Budget 2023
The relief available under the Special Assignee Relief Programme (SARP) is set to expire on 31 December 2022. While the announcement from the Minister on Budget Day that SARP is to be extended past this date to 31 December 2025 is a welcome development for many multinationals, the announcement that the relief is to be subject to an increased restriction may result in its attractiveness being reduced.
Commenting on the announcements, Colin Forbes, Tax Partner, Deloitte commented;
Forbes concluded:
Foreign Earnings Deduction (FED)
The Foreign Earnings Deduction (FED) plays an important role in encouraging and incentivising Irish businesses to export to emerging markets. However, there are many areas of the relief which require amendment to improve its attractiveness and usefulness for Irish companies. The extension to the FED until 31 December 2025 will be a welcome development for many companies, but continuous reform of the relief will be required to ensure that it remains fit for purpose.
Commenting on the Ministers Budget speech, Billy Burke, Tax Partner, Deloitte said:
FED is an Income tax relief available to employees who spend a minimum of 30 days working overseas in certain territories, allowing an individual to ultimately reduce their tax bill by up to €14,000. Certain aspects of the relief require amendment to ensure that it remains fit for purpose and achieves its objectives. We are not alone in our view, as outlined in the report issued from the Commission on Taxation which notes that the relief does not appear to be adequately targeted to achieve its policy objectives. Broadening the application criteria and extending the annual maximum relief would, in our view, go some way to bridging the gap.
Burke concluded;
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