Key Employee Engagement Programme
The Key Employee Engagement Programme, or KEEP, is a tax-efficient share option scheme designed for use by unquoted small and medium enterprises (SMEs). The tax relief afforded by KEEP provides an option for SMEs to attract, retain, and motivate key employees by offering them tax-advantaged share options as a form of remuneration. This supports smaller firms in competing with larger companies for talent and fosters long-term employee commitment and business growth.
KEEP is currently due to expire on 31 December 2025. Following engagement with stakeholders in relation to the scheme, and subject to State Aid approval, it is intended to extend KEEP for a further three years, to 31 December 2028.
Special Assignee Relief Programme (SARP)
SARP provides for an Income Tax relief on a portion of income earned by certain employees assigned from abroad to work in the State by their relevant employer. The Finance Bill extends the scheme for a further five years to 31 December 2030, and it also provides for a number of other changes.
To qualify for the relief, an employee who first arrives in the State on or after 1 January 2026 will be required to have an annualised base salary of not less than €125,000 in the year of their arrival. The threshold of the annualised employment income, which is used in the calculation of the relief, will also increase to €125,000 from 1 January 2026. The employer certification requirement will also be amended, so that employees can qualify for the relief where the certification is made after 90 days but within 180 days from the employee’s date of arrival in the State. However, in such cases, relief will be limited to a maximum of four consecutive tax years.
The filing date for the annual end-of-year employer return will be extended to 30 June in respect of the 2025 tax year and subsequent tax years.
Foreign Earnings Deduction (FED)
FED is an Income Tax relief available to employees who are tax-resident in Ireland but who travel out of the State to temporarily carry out duties of their office or employment in certain qualifying countries. The Finance Bill extends FED for a further five years to 31 December 2030 and it also provides for additional amendments to the relief.
From 1 January 2026, the maximum amount of employment income that may qualify for Income Tax relief will be increased from €35,000 to €50,000. The relief will also be extended to apply in respect of qualifying time spent working in two additional countries; the Philippines and Türkiye.
The definition of a qualifying day will be amended to remove the requirement that three consecutive days must be spent working in a relevant country. It will also be provided that relief will only be available where the time working in a relevant country is reasonably required for the purposes of the performance of employment duties.