Funds Taxation
Finance Bill 2025 will reduce the rates of taxation that apply to investments in Irish-domiciled funds and life assurance policies, from 41% to 38%. This reduction will also apply to equivalent offshore funds and ETFs.
The Minister also announced that he intends to publish a roadmap early next year, setting out the intended approach to simplify and adapt the tax framework to encourage retail investment, including taking account of the European Commission’s recommendation on Savings and Investment Accounts.
An implementation plan for the overall Funds Sector 2030 Report has also been published today.
The Minister also noted in his speech that the report recommended a public consultation on potential options for an entity-level tax for IREFs, but that he does not propose to progress this recommendation. However, his department will undertake a public consultation on proposals to simplify the IREF regime without limiting its effectiveness.
Stamp Duty exemption for Acquisition of Shares
In order to support our capital markets, the Minister announced the introduction of a new exemption from the 1% Stamp Duty on acquisition of shares in Irish-registered companies. It will apply to the shares of companies admitted for trading on a regulated market, a multilateral trading facility, or an equivalent third country market, and which have a market capitalisation of below €1 billion. A sunset clause will apply, expiring on 31 December 2030.
Due to the introduction of the new exemption, the existing Stamp Duty exemption for shares in Irish-registered companies traded on the Euronext Growth Market (formerly the Enterprise Securities Market) will be removed.
Bank Levy
The Banking Levy is to be extended for a further year, with a target yield of €200 million.
Participation Exemption
As readers will be aware, last year, a participation exemption regime for foreign dividends was introduced to simplify double tax relief and enhance Ireland’s competitiveness for multi-national businesses. Announced today were a number of changes to the exemption to be provided for in Finance Bill 2025, including:
R&D Tax Credit Regime
Following commitments made in both Budget 2025 and the Programme for Government, and a review undertaken by the Department of Finance this year, Budget 2026 provides for the following enhancements to the regime:
Furthermore, the Minister announced that he will be publishing a Research and Development compass in the coming weeks, which will consider targeted changes to the R&D tax credit regime to better align with industry practices, for example, in the areas of outsourcing and qualifying expenditure definitions, as well as setting a pathway for development of innovation supports.
Review of Tax Treatment of Interest
Today, the Minister also published an Action Plan to reform Ireland’s tax regime for interest. The Action Plan is informed by responses received to an earlier consultation on the tax treatment of interest in Ireland. The primary request arising from that consultation was for fundamental reform of the underlying framework for the taxation and deductibility of interest. The Action Plan sets out a phased approach to progress reforms to achieve a simplified regime that supports competitiveness and protects the tax base. As part of the plan, a feedback statement will be published in November for further consultation.