Periodic Foreign Tax Credit

Payroll administrators can enter a Periodic Foreign Tax Credit in PAYE Additional Information for employees eligible for real-time foreign tax credit relief. The payroll calculation uses the periodic amount to reduce the employee’s income tax liability.

The feature also supports a Yearly Foreign Tax Credit. The calculation returns the foreign tax credit amount with other PAYE results and balances for processing and reporting.

This enhancement helps support payroll compliance where eligible employees are subject to tax in Ireland and another jurisdiction. It can reduce the immediate payroll impact of simultaneous withholding tax deductions while foreign tax credit relief is processed.

Steps to enable and configure

1. Navigate to My Client Groups > Payroll > Calculation Cards.
2. Search for and select the employee, then open Statutory Deductions  > Taxes > Pay As You Earn > PAYE Additional Information > PAYE Additional Information Details.
3. Enter a value in either Yearly Foreign Tax Credit or Periodic Foreign Tax Credit. Don't enter values in both fields at the same time. 
   • Foreign tax credit relief processed through PAYE doesn't replace the employee’s formal foreign tax credit claim through an Irish income tax return after the tax year ends. 
   • Where the employee’s effective tax rate is lower than the foreign effective tax rate, relief is granted partly as a tax credit and partly by reducing the double-taxed income assessed.
4. Save the calculation card.