I am advised by Revenue that there are provisions in the Taxes Consolidation Act (“TCA”) 1997 which specifically exempt from income tax certain payments which are made to or on behalf of, members of the Irish Defence Forces.
Section 120B TCA 1997 provides an exemption from benefit-in-kind (“BIK”) where expense is incurred, by or on behalf of the Minister for Defence, in connection with the provision of living-in accommodation and certain health care expenses to members of the Permanent Defence Forces. For the purposes of this exemption, “health care” means the prevention, diagnosis, alleviation or treatment of an ailment, injury, infirmity, defect or disability, and includes care received by a woman in respect of pregnancy, but does not include:
• routine ophthalmic treatment, being the provision and repairing of spectacles or contact lenses, or
• cosmetic surgery or similar procedures, unless the surgery or procedure is necessary to ameliorate a physical deformity arising from, or directly related to, a congenital abnormality, a personal injury or a disfiguring disease.
Further guidance on the BIK exemptions noted above can be found using the links below:
• Accommodation – paragraph 2.3 of Tax and Duty Manual Part 05-01-01c - www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01c.pdf.
• Health Care – paragraph 16.5 of Tax and Duty Manual Part 05-01-01L - www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-05/05-01-01l.pdf.
Section 196A TCA 1997 exempts from income tax certain allowances or emoluments paid to officers of the State as the Minister for Finance certifies as representing compensation for the extra cost of living outside the State while on foreign service. Included in the definition of officers of the State are members of the Permanent Defence Forces. Normal salary payments are excluded from this income tax exemption and continue to be assessable as income arising from the holding of an office.
Section 204 TCA 1997 provides for an exemption from income tax in respect of:
• all wound and disability pensions as granted under the Army Pensions Acts 1923 to 1980,
• all gratuities in respect of army wounds or disabilities as granted under the Army Pensions Acts 1923 to 1980,
• demobilisation pay and gratuities granted to officers of the National Forces or the Defence Forces of Ireland on demobilisation,
• deferred pay (within the meaning of any regulation under the Defence Act, 1954), and
• gratuities granted in respect of service with the Defence Forces.
Section 472BB TCA 1997 provides for the sea-going naval personnel credit, which is available to permanent members of the Irish Naval Service, subject to certain conditions being met. The credit is currently available for the years of assessment 2020 to 2024, and an extension to the 2029 year of assessment has been announced in Budget 2025. This extension has been provided for in section 4 of the Finance Bill 2024 (as initiated) and is subject to the passage of the Bill through the Oireachtas. The credit is valued at €1,500 and is available to qualifying members of the Irish Naval Service who spend at least 80 days at sea in the year of assessment performing the duties of their employment. The Finance Bill was published on 10 October 2024 and is available to view at - www.gov.ie/en/publication/d30c7-finance-bill-2024/.
In addition to the above provisions, an annual flat rate expense allowance of €150 is available to cover the dry cleaning of ceremonial uniforms for all enlisted personnel not in receipt of a Uniform Replenishment Allowance.
Further guidance on flat rate expense allowances and information on how to make a claim is available on the Revenue website:
• www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/income-and-employment/flat-rate-expenses/index.aspx.
