Business Tax

Budget 2026. Business Taxes. Corporation Tax. R&D Tax Credits. Corporate Taxation. Capital Gains Tax.

Today, Tuesday, 7^th October 2025, the Minister for Finance, Paschal Donohoe and the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, Jack Chambers presented Budget 2026.  In this series of articles, we have outlined some of the tax changes which we consider most relevant under the following headings (a) Personal Tax, (b) Business Taxes including Capital Gains Tax, (c) VAT, (d) Housing/Property, (e) Agri-taxation, (f) Investments and (g) Global Mobility and Employment.

BUSINESS TAXES

• As you’re aware, the Revised Entrepreneur Relief provides for a 10% rate of Capital Gains Tax on certain gains arising from the disposal of qualifying business assets. Previously, the lifetime limit was €1 million.  Today, the Minister announced that the lifetime limit on capital gains qualifying for CGT Revised Entrepreneur Relief will be increased to €1.5 million, from 1^st January 2026.

• A new exemption from the 1% stamp duty on acquisitions/transfers of shares in Irish registered companies is being introduced. It will apply to the shares of companies with a market capitalisation of below €1 billion that are admitted for trading on certain regulated markets. It will replace the existing stamp duty exemption for companies trading on the Euronext Growth Market.  The exemption is set to expire on 31^st December 2030.

• Previously, Special Assignee Relief Programme (SARP) was an income tax exemption for assignees of 30% of their relevant employment income between €100,000 and €1 million, provided certain criteria were met.  Budget 2026 extended the Special Assignee Relief Programme (SARP) for a further five years, to 31^st December 2030.   From 1^st January 2026, in order to qualify, new claimants of the Relief must have a minimum annual salary of €125,000.   This amendment will not affect existing claimants.  They can continue to avail of SARP, as before, in 2026 and further relevant years.  Finance Bill 2025 is expected to outline the simplification of certain relevant administrative requirements.

• Foreign Earnings Deduction (FED) relief has been increased to €50,000 from 1^st January 2026 and extended for a further five years, to 31^st December 2030.  The Philippines and Turkey have been included in the list of qualifying countries.  Finance Bill 2025 is expected to outline administrative amendments.

• The Key Employee Engagement Programme (KEEP), which was due to expire on 31^st December 2025.  Finance Bill 2025, however, will provide for an extension to this Income Tax exemption until the end of 2028, subject to European Commission approval.  KEEP provides for an exemption from Income Tax, Universal Social Charge and PRSI for any gain arising on the exercise of a share option by a qualifying individual in a qualifying company.

• Budget 2026 announced that the Research & Development (R&D) tax credit will rise to 35%.  The first year payment threshold will increase from €75,000 to €87,500.  An administrative simplification measure was also announced. This will allow 100% of an R&D employee’s emoluments as qualifying costs where at least 95% of that individual’s time is spent on qualifying R&D activities.  This update will provide more certainty and a reduction in administration for companies.

• The Digital Games Tax Credit, which provides for a 32% credit on qualifying expenditure up to €25 million, is being extended by six years to 31^st December 2031. Eligibility is being expanded to allow claims in relation to certain post‑release activities which are subject to qualifying conditions as well as EU approval.

• The Section 481 Film Tax Credit, which currently provides for a 32% credit on qualifying expenditure up to €125 million on certain productions, has been enhanced to provide a new 40% rate for productions with a minimum of €1m of eligible expenditure on relevant visual effects work, up to a maximum of €10 million eligible expenditure per production.  As the Film Tax Credit is an approved State aid, the enhancement measure will be subject to EU approval.

• Finance Act 2024 introduced a Participation Exemption for foreign dividends received, on or after 1^st January 2025, from subsidiaries in EU/EEA and double tax treaty partner jurisdictions.  Today, the Minister announced that several changes to the exemption will be provided for in Finance Bill 2025.  These include (i) broadening the geographic scope beyond dividends paid from subsidiaries in the EU/EEA and double tax treaty partners to include qualifying dividends received from jurisdictions that apply a non-refundable dividend withholding tax.  Other changes include (ii) reducing the period for which companies must have been resident in a jurisdiction within the geographic scope of the relief from five to three years, before paying a dividend, as well as (iii) providing clarification that the acquisition of a shareholding is not deemed to be the acquisition of a business asset for the purposes of the exemption.

• Following an extensive consultation, an action plan for the reform of Ireland’s taxation regime for interest was published today.  The primary request of stakeholders, arising from public consultation, was for a fundamental reform of the framework for the taxation and deductibility of interest.  The Action Plan sets out the timeline for phase one and nine other areas for potential reform under future phases are identified.  The main proposals put forward include: (a) an alignment of the tax treatment between trading and passive interest income, (b) the introduction of a renewed and simplified test for the deductibility of interest for corporation tax purposes as well as (c) the widening of the scope of interest deductibility to include ‘interest equivalents’.

• An extension to the Accelerated Capital Allowances schemes for energy efficient equipment until 31^st December 2030 was announced today.  This provides for an accelerated deduction of 100% in year one for business expenditure incurred on certain energy efficient equipment.

• The Accelerated Capital Allowances Scheme for Gas Vehicles and Refuelling Equipment was also extended to 31^st December 2023.

• The Minister announced that a public consultation on withholding tax will be launched soon to explore opportunities to modernise, digitalise and further expand the scope of withholding taxes.  A joint Department of Finance and Revenue public consultation is expected to be launched soon.

For further information, please click: https://www.revenue.ie/en/corporate/press-office/budget-information/current-year/budget-summary.pdf

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Corporation Tax Returns. CT1 Forms. Business Tax Advisors. Tax Deadline

On 27th August 2025, Revenue updated the The Tax and Duty Manual Part 38-02-01 to include links to the following Tax and Duty Manuals:

1. Completion of Corporation Tax Returns Form CT1 2024
2. Completion of Corporation Tax Returns Form CT1 2023

If you require assistance filing your CT1 Forms, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Income Tax Return. Filing Form 11. Self Assessment Personal Tax Returns. 31st October 2025 Filing Deadline

You will need to file an Income or Personal Tax Return on or before 31^st October 2025 if you are one of the following:

1. A self employed individual, someone working on a freelance/consultancy basis or a contractor.

2. A proprietary director i.e. a Director of a limited company who can control in excess of 15% of the ordinary share capital of the company, either directly or indirectly.

3. A Holder of an investment fund i.e. where an individual acquires a material interest in certain investment funds, that person may be deemed to be a chargeable person for that period. This means that they must file the relevant tax return and include details of the fund in that return.

4. If you receive income and gains in relation to certain investment funds.

5. If you have an eight year anniversary in relation to your investment fund.

6. A landlord with long term commercial or residential rentals.

7. An individual with short-term lettings including the provision of self-catering accommodation, Airbnb income, etc.

8. If you have deposit interest, dividend income, shares in lieu of dividends, foreign rental income, etc.

9. If you carry out professional services on which PSWT is charged.

10. If you have disposed of assets.

11. If you are a non-domiciled person who has remitted taxable foreign income or gains to Ireland.

12. If you have received, earned or generated income from any source, other than your Irish employment.

The tax return deadline is Wednesday 19th November 2025 for those that file their Tax Return and pay their associated Tax liability through ROS.

If you do not use ROS, then the tax deadline is 31^st October 2025.

In summary, you are required to:

• File your 2024 self-assessment Income Tax Return
• Pay the balance of your 2024 Income Tax liability and
• Pay your 2025 preliminary tax

On or before either (a) 31^st October 2025 or (b) 19^th November 2025 if you file through ROS

For further information, please click the link:  Revenue eBrief No. 088/25

For assistance in preparing your Income Tax Return by the 31st October 2025 deadline, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Income Tax Returns, Corporation Tax Returns, Level 1 Compliance Intervention, Revenue Non-Filer

As part of the Irish Revenue Commissioners’ Annual Non-Filer Programme, Notices will be sent to taxpayers who are currently registered for Income Tax or Corporation Tax but who have not filed Income Tax or Corporation Tax Returns for tax years up to and including 2023.  Tax Agents will receive a ROS Inbox Notification on 31^st January 2025 providing them with a list of clients who have been issued with a Reminder to File Notice.  Please be aware that this notice is what is deemed to be a Level 1 Compliance Intervention.

If you have received a Notice but you are no longer considered to be a “Chargeable Person”, the advice is to cancel your Income Tax or Corporation Tax registration as soon as possible.

For full information on who is deemed to be a “Chargeable Person” please click:

https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-41a/41a-01-01.pdf

According to Revenue’s “Reminder to file – Income Tax Return” Notice:

“This notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. The non-filing of a required tax return by chargeable persons can result in a penalty charge and a more detailed review by Revenue. It is also an offence for which a person can be prosecuted. Further information on your rights and obligations under Revenue’s Compliance Intervention Framework can be found on www.revenue.ie.

In addition, if the tax return(s) is not filed it may lead to the loss or refusal of tax clearance.”

According to Revenue’s “Reminder to file – Corporation Tax Return” Notice:

This notice is a Level 1 Compliance Intervention in accordance with Revenue’s Compliance Intervention Framework. The non-filing of a required tax return can result in a more detailed review by Revenue. It is also an offence for which a person can be prosecuted. It can also result in the restriction of certain reliefs, and the loss or refusal of tax clearance. Further information on your rights and obligations under Revenue’s Compliance Intervention Framework can be found on www.revenue.ie.

For further information, please click:

https://www.revenue.ie/en/tax-professionals/tdm-wm/compliance/returnscompliance/it-and-ct-returnscompliance/income-tax-and-corporation-tax-non-filer-programme.pdf

If you receive a Level 1 Notification and you are required to file Tax Returns for outstanding years, please contact us at queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Income Tax. Corporation Tax. Capital Acquisitions Tax. Capital Gains Tax. Local Property Tax. VAT. Pay and File Deadlines.

January is a very important month in terms of pay and file obligations.  To avoid exposure to interest and penalties, please find below a list of pay and file deadline dates for January 2025 under the following tax heads: Income Tax, Corporation Tax, VAT, Local Property Tax, Capital Gains Tax, Capital Acquisitions Tax, Dividend Withholding Tax and Professional Services Withholding Tax.

1^st January 2025

• 2024 Employment Detail Summary is available.

• The minimum Wage Increased to €13.50 per hour.

• Changes to USC – The 4% rate is reduced to 3% and the entry threshold increases to €27,382.01

• Changes to Rate Bands from €42,000 to €44,000 for individuals. Married couples and civil partners with one income will increase to €53,000 and married couples and civil partners with two incomes will increase to €88,000.

• Increases from €1,875 to €2,000 for Single Persons, Employee PAYE Tax Credit, Earned Income Tax Credits and Widowed Person or Surviving Civil Partner with dependent child(ren).

• Commencement of phased payments for Local Property Tax.

• Increases in VAT thresholds for goods and services. From €40,000 to €42,500 for services. From €80,000 to €85,000 for goods.

• The increased thresholds for Capital Acquisitions Tax: From €335,000 to €400,000 (Group Class A), from €32,500 to €40,000 (Group Class B) and €16,250 to €20,000 (Group Class C)

10^th January 2025

Latest date for paying Local Property Tax in full through an approved PSP, or by debit or credit card.

14^th January 2025

• Monthly Return and payment for PAYE, PRSI and USC for December 2024 – The payment date is extended to 23rd for users who pay and file via ROS.

• Quarterly Return and payment for PAYE, PRSI and USC for the period October to December 2024 – The payment date is extended to 23rd for users who pay and file via ROS.

• Return and payment of Dividend Withholding Tax for December 2024

•  F30 Monthly Return and payment of Professional Services Withholding Tax for December 2024

15^th January 2025

Monthly direct debit payments for Local Property Tax (LPT) start and continue on the 15th day of every month, thereafter.  Date extended to 21st March 2025 if paying by Annual Debit Instruction.

19^th January 2025

• Monthly VAT3 Return & Payment for December 2024.

• Bi-Monthly VAT3 Return & Payment for period 1^st November to 31^st December 2024.

• Four Monthly VAT3 Return & Payment for period 1^st September to 31^st December 2024.

• Bi-Annual VAT3 Return and payment for period 1^st July to 31^st December 2024.

• Annual VAT3 Return and payment for period 1^st January to 31^st December.

Return of Trading Detail:

• where the VAT accounting period ends between 1st and 31^st December and monthly VAT3 Returns are filed.

• where the VAT accounting period ends between 1st November and 31^st December and bi-monthly VAT3 Returns are filed.

• where the VAT accounting period ends between 1st September and 31^st December and four-monthly VAT3 Returns are filed.

• where the VAT accounting period ends between 1st and 31^st December and annual VAT3 Returns are filed.

For ROS filers, the time limit for filing a VAT return is extended to the 23rd day of the month.

1^st to 21^st January 2025

• Corporation Tax Preliminary Tax for Accounting Periods ending between 1^st and 28^th February 2025

• Corporation Tax Returns for Accounting Periods ending between 1^st and 30^th April 2024.

•  Corporation Tax Balancing payments due for Accounting Periods ending between 1^st and 30^th April 2024

For ROS filers, the time limit for filing a CT Return and/or payment is extended to the 23rd day of the month.

31^st January 2025

• Payment of capital gains tax for assets sold between 1^st December 2024 and 31^st December 2024

• OSS VAT return and payment for the period 1^st October to 31^st December 2024

• IOSS Monthly Return and payment due for period December 2024.

For VAT details, please click:

https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/vat-thresholds.aspx

https://www.revenue.ie/en/vat/vat-ecommerce/import-oss/index.aspx

For information on Standard Rate Bands and Tax Credits, please click:

https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/tax-relief-charts/index.aspx

For further information on Local Property Tax, please click:

https://www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Business Tax. Corporation Tax. UK Taxes. Reliefs and Changes. UK Autumn Budget

Today, 30^th October 2024, the Chancellor of the Exchequer, Rachel Reeves, delivered the UK Autumn Budget.  She announced the publication of the Corporation Tax Roadmap.  In it, she confirmed that there would be no change to the current corporation tax rate, which is capped at 25%, until 31^st March 2027.  The Small Profits Rate and marginal relief will remain at their current rates and thresholds.  No changes will be made to other business tax areas including:

1. The current Patent Box and Intangible Assets Regime which will be maintained.

2. The Audio-Visual Expenditure Credit will be maintained.  The Video Game Expenditure Credit will also be retained.

3. With regard to Capital Allowances, full expensing for plant and machinery expenditure will be retained.  The £1 million Annual Investment Allowance will also be maintained.

4. 100% first year allowances for qualifying expenditure on zero-emission cars and electric vehicle charge points will be extended to 31^st March 2026.

5. In relation to R&D Reliefs, the current rates for the merged R&D Expenditure Credit Scheme as well as the Enhanced Support for R&D Intensive SMEs will be kept.

6. Support to the global taxation agreements under Pillar 1 and Pillar 2 will continue.

Business Tax Changes

• The Pillar Two Undertaxed Profits Rule will be introduced into law and will take effect from 31st December 2024.

• The Government have introduced changes to the taxation of Employee Ownership Trusts and Employee Benefit Trusts which will take effect from 30^th October 2024.

• For 2025/26, Retail, Hospitality and Leisure businesses will be given 40% relief on their business rates. The maximum amount available in relief each billing year is £110,000 per business.

• From 6^th April 2025, the special tax rules for Furnished Holiday Lets will be abolished. Individuals, corporates, and trusts who operate or sell furnished holiday lettings accommodation will be affected.

• Employer National Insurance contributions will increase to 15.0% from 6^th April 2025. The secondary threshold will be reduced to £5,000 per year, the Employment Allowance will be increased to £10,500 per annum while the £100,000 threshold will be removed.

• There will be further consultation on Transfer Pricing.

• Changes to the treatment of carried interest. From April 2025, the CGT rate applicable to carried interest will increase to 32%.

Anti-Avoidance Legislation

The Government have introduced new Anti-Avoidance legislation in respect to loans to participators.  From 30^th October 2024, these reforms will prevent shareholders from extracting untaxed funds from Close Companies. This new legislation is being introduced to prevent loans which are repaid and then reborrowed from associated companies from avoiding the s455 charge.

Also, from 30^th October 2024, the way in which capital gains are taxed when a Limited Liability Partnership is liquidated has been amended. It relates to situations where assets are disposed of to (i) a contributing member, (ii) a connected company or (iii) any other connected person.  The chargeable gain accruing to the contributing member will be computed as if the gain had arisen at the time they initially contributed the asset to the Limited Liability Partnership.

For further information, please click:

https://www.gov.uk/government/collections/autumn-budget-2024-tax-related-documents

For all your Irish, UK or cross-border business tax concerns, please contact us on queries@accountsadvicecentre.ie

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Auto-enrolment Pension Scheme. Payroll. Retirement Pension. No Income Tax Relief. Employers, Employees and Directors

Today, 7^th October 2024, the Minister for Social Protection announced that the pensions auto-enrolment scheme will commence on 30^th September 2025. From that date, employers must automatically enroll eligible workers into a workplace pension scheme, as part of a Government initiative, aimed at boosting retirement savings.  This government retirement savings system is for employees who are not already contributing into a pension scheme through their payroll. The Automatic Enrolment Retirement Savings Systems Act 2024 was signed into law on 9^th July of 2024 and a commencement order was signed on 30^th September 2024.  This scheme involves mandatory employer and employee contributions into a pension fund in addition to a Government top up.  With this new auto-enrolment scheme, most workers will now be entitled to (i) their own pension plus (ii) the State Pension on retirement.

So, what is it?

Under this new Act:

• Employees will be automatically enrolled in this scheme if they are aged between 23 and 60 years. It’s important to keep in mind that the employee can voluntarily opt out after six months.

• This auto-enrolment scheme will apply to every private sector worker in Ireland provided that the employee is not in what is termed “exempt employment.”

• The employee must earn more than €20,000 gross per year. Gross pay includes allowances as well as non cash benefits.

• For employees earning less than €20,000 per year or who are outside the prescribed age range, it is possible to opt in voluntarily.

• Contributions will be made by (i) the employee, (ii) the employer and (iii) the Government.

• The scheme will be managed by the National Automatic Enrolment Retirement Savings Authority which is under the supervision of the Pensions Authority.

• In situations where an employee previously contributed to a pension but has since stopped, it is possible for that individual to be enrolled in the scheme, provided they meet the relevant criteria.

• Employer AE contributions will not be taxed as a benefit-in-kind on the employee.

What is an “exempt employment”?

The scheme is aimed at employees who are not paying into a qualifying pension plan.  Therefore, an ‘exempt employment’ is deemed to be one where an employee or employer is already making contributions, through the payroll system, to any of the following: (a) an occupational pension scheme, (b) Personal Retirement Savings Account, (c) a Retirement Annuity Contract or (d) a Pan-European Personal Pension Product.

What are the Auto-enrolment contribution rates?

Contributions to the auto-enrolment pension scheme will be based on a set percentage of your wage/salary (please see below) and deducted through payroll.

Employers must match their employee contributions.

The Government must match one third of the employee contribution.

The Contributions will gradually increase over a ten year period.

The employee contributions will not qualify for income tax relief.

Contributions are capped at €80,000 of an employee’s gross annual salary/wage.  In other words, an upper annual limit of €80,000 applies to earnings.  No contributions are required on earnings exceeding this cap.  Employees earning more than €80,000 per annum can still contribute, however, employer and Government contributions will not apply to earnings above €80,000.

Final Points

• As the Auto-Enrolment Pension Scheme operates throughout your career, you don’t have to do anything if you move jobs.

• In the event of the death of an auto-enrolled employee, it is possible for their personal representative to apply to access the balance in the employee’s account, as part of their estate.

• An employee can suspend contributions at any time.

• Directors who deemed to be “self-employed” for PRSI purposes are not considered eligible to contribute to this Auto-Enrolment Pension Scheme.

• The Automatic Enrolment Retirement Savings Systems Act 2024 provides for a number of offences, with sanctions ranging from fines of €5,000 to €50,000 and/or imprisonment, depending on the particular offence committed.

For further information, please click:

https://www.gov.ie/en/publication/c6d6a-auto-enrolment-your-questions-answered/?referrer=https://www.gov.ie/en/publication/01568-auto-enrolment-your-questions-answered-rol-draft/

https://www.irishstatutebook.ie/eli/2024/act/20/enacted/en/html

https://www.youtube.com/playlist?list=PLfOMyQE5RqGzeqOMKqB1M3KyOCtKU8bjk

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Business Tax Advice. Corporation Tax. Research & Development (R&D), Capital Gains Tax (CGT)

The Minister for Finance Jack Chambers published his first Budget today  announcing a number of changes to our corporate tax regime.  A raft of tax measures and policies will be introduced to support Irish start-ups, small and medium-sized enterprises (SMEs) and multinational businesses.  Budget 2025 provided for a total budget package of €10.5b  Our focus in this article is purely on Business Taxes under Capital Gains Tax, Corporation Tax, VAT and Employer/Employee Taxes.

SUMMARY OF BUSINESS TAX MEASURES:

1. There will be an increase in the VAT registration thresholds

2. There will be an extension of the temporary 9% VAT rate in relation to supplies of gas and electricity for an additional six months.

3. There will be an increase in the farmer’s flat rate addition from 1^st January 2025.

4. A new 9% VAT rate on heat pumps has been introduced.

5. Employer/Employee Tax Changes – Amendments to Benefit-in-Kind (BIK) on cars

6. Employer/Employee Tax Changes – There will be an increase in the annual employee Small Benefit Exemption from €1,000 to €1,500. A business will also be able to give five non-cash benefits to their employees in a single year.

7. CGT Changes – Amendments to Retirement Relief.

8. CGT Changes – Amendment to Relief for Angel Investors.

9. Corporation Tax Changes

10. Participation Exemption – Exemption for companies in receipt of Foreign Dividends

VALUE ADDED TAX (VAT)

• With effect from 1^st January 2025, the VAT registration thresholds will be increased from €40,000 to €42,500 for services.

• The VAT registration thresholds will be increased from €80,000 to €85,000 for goods with effect from 1^st January 2025.

• The unregistered farmers flat rate scheme will be increased from 4.8% to 5.1%.

• There will be an extension of the reduced 9% VAT rate on electricity and gas up to 30^th April 2025.

• From 1^st January 2025, the 9% VAT rate will also apply to heat pump installations. This will have the effect of reducing the cost of replacing inefficient boilers.

EMPLOYER / EMPLOYEE TAXES

SMALL BENEFIT EXEMPTION

• There will be an increase in the annual limit of the small benefit exemption from €1,000 to €1,500.

• It has also been amended to allow five non-cash benefits, up from two, to be granted by an employer in a single year. The cumulative total of the first five benefits in a calendar year cannot exceed €1,500.

• From 1^st January 2024 an employer is required to return details of all qualifying incentives provided to employees where the small benefit exemption applies.

• This benefit can be given to any employee of the company, including directors and shareholders, providing they are on the payroll.

BENFIT-IN-KIND

• Budget 2025 introduced a BIK exemption for home car chargers provided by employers. It provides for an exemption from Benefit-in-Kind where it is the employer who incurs the cost of providing a facility for electric charging of vehicles at the home of an employee or director.

• The proposed tapering of Benefit-in-Kind Relief for electric vehicles has been deferred. The universal relief of €10,000 which applied to the Original Market Value of a vehicle in Category A – D is being extended to 31^st December 2025.  The amendment to the lower limit of the highest mileage band has also been extended until 31^st December 2025.   Therefore, the highest mileage band is entered into at 48,001km.

CAPITAL GAINS TAX

Retirement Relief

Retirement Relief (CGT) supports the cost effective / tax efficient transfer of businesses and farms from one generation to the next.

Finance Act 2023 introduced a number of amendments to the Retirement Relief regime which included:

1. an increase in the upper age limit from 66 years old to 70 years old.

2. A cap of €10 million of proceeds / market value where the individual disposing of the assets to a child is aged from 55 to 69 years.

3. The current limit of €3million will continue to apply but only from age seventy.

These changes were to come into effect on 1^st January 2025.

Budget 2025 will retain the increased upper age limit. It also introduced a clawback period of twelve years on the Relief.

This means that any tax arising due to the cap of €10 million will be abated provided the assets are retained for twelve years.

In other words, the €10 million cap, due to be introduced on 1^st January 2025, will only apply in circumstances where the child disposes of the assets within twelve years.

Angel Investor Relief

Angel Investor Relief, introduced in Budget 2024, was aimed at encouraging business angel investment in innovative start-ups.

Finance Act 2023 introduced a reduction on this rate for angel investors, bringing it down from 33% to 16% or 18%.

Budget 2025 provides Capital Gains Tax Relief for a third party individual who takes a significant minority shareholding (i.e. between 5% and 49% of the ordinary issued share capital of the company) for a period of at least three years,  in a certified innovative start-up small and medium enterprise (SME) company which is less than seven years old.   The investment by the individual must be in the form of fully paid-up newly issued shares costing at least €20,000 or €10,000 if acquiring between 5% and 49% of the ordinary issued share capital of the company.

Qualifying investors will be able to avail of an effective reduced rate of CGT of 16%, or 18% if through a partnership, on a gain up to twice the value of their initial investment.

There was previously a lifetime limit of €3 million on gains to which the reduced rate of CGT will apply.  Budget 2025 has increased this limit to lifetime gains of up to €10 million.

 Therefore, the amount on which the reduced CGT rates of 16% or 18% will apply is the lowest of the following:

1. The actual chargeable gain.
2. Twice the amount of the investment.
3. €10 million less the total of all/any other chargeable gains that may qualify under this Relief.

CORPORATION TAX 

The following will be extended for a further two years until 31^st December 2025:

1. Employment Investment Incentive (EII),
2. Start-Up Relief for Entrepreneurs (SURE) and
3. the Start-Up Capital Incentive (SCI)

In addition, the EII limit on the amount that an investor can claim relief on will be doubled i.e. increasing from €500,000 to €1,000,000.

It is proposed to increase the SURE relief available to a maximum of €140,000 per year or a total of €980,000 over seven years.

Research and Development (R&D) Tax Credit

As you’re aware, the existing Research and Development (R&D) Tax Credit provides a 30% tax credit for all qualifying R&D expenditure.

The first year payment threshold will now increase from €50,000 to €75,000.

Companies with claims of between €75,000 and €150,000 will benefit from a €25,000 increase in the first instalment of their claim.

Companies with claims of in excess of €150,000 will continue to receive a first instalment amount based on 50% of the Research & Development Tax Credit claim.

Two new Audio-visual incentives

1. Tax Credit for Unscripted Productions

A new tax credit will be introduced for the unscripted film production sector.

The relief will take the form of a 20% Corporation Tax Credit for certain production expenditure up to a maximum limit of €15 million per project.

The commencement will be subject to State Aid approval from the European Commission.

A cultural test will be introduced.

2. Scéal Uplift

The second incentive is an 8% uplift referred to as the “Scéal Uplift”.

This involves an uplift of 8% to the existing film credit in respect of certain feature film productions.

It will be applied to the existing film credit and will result in a tax credit rate of 40% for projects with a maximum qualifying expenditure of up to €20 million.

This incentive is for small to medium budget productions under the Section 481 film tax credit.

As with the Tax Credit for Unscripted Productions, the Scéal Uplift is subject to State Aid approval.

FOREIGN DIVIDENDS

A new Participation exemption for foreign sourced dividends from subsidiaries in EU/EEA and tax treaty jurisdictions will be introduced with effect from 1st January 2025.  The aim is to simplify existing Double Taxation Relief provisions.

Currently, Ireland operates a worldwide corporate tax regime.  This means that all the profits (both domestic and foreign) earned by an Irish resident company are subject to Irish tax with Relief for any foreign taxes deducted under, a ‘tax and credit’ regime.

Under the new rules, a company will have the option of either (a) claiming the participation exemption or (b) continuing to use existing tax-and-credit relief.

To do this, an election will have to be made in the company’s annual corporation tax return. It will apply to all qualifying dividends in that particular period.

For non-qualifying jurisdictions, the existing method of claiming double taxation relief should continue.

The new participation exemption for foreign source dividends will come into effect from 1^st January 2025.

For full information on Budget 2025, please click https://www.gov.ie/en/publication/e8315-budget-2025/

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Business Grant Scheme – Commercial Rates for Businesses

As part of Budget 2024, the government signed off on a package of €257 million for the Increased Cost of Business Grant Scheme.  The main aim of this Grant is to support small and medium sized businesses by contributing towards their rising business related costs including energy, labour, rent, etc.  In order to qualify the business must be a commercially trading business which currently operates from a property that is commercially rateable.  If your business does not have rateable premises then you won’t be covered by this scheme.  It is important to keep in mind that this is not a Commercial Rates waiver and businesses should continue to pay their Commercial Rates bill.

To Qualify for the Increased Cost of Business Grant

To qualify for the Increased Cost of Business (ICOB) grant your business must meet the following conditions:

• It must be a commercially trading business, currently operating directly from a property that is commercially rateable.

• It must have been trading on 1st February 2024 and your intention must be to continue trading for at least three months.

• Your commercial rates bill must be equal to or less than €30,000 for 2023.

• You must submit confirmation of your bank details to the relevant Local Authority.

• The business must be considered rates compliant. This includes businesses with phased payment plans in place.

• It must possess a valid Tax Registration Number.

• It must be tax compliant.

The Grant Amount

The Increased Cost of Business (ICOB) grant is a once-off payment based on the value of the 2023 commercial rates bill.

The grant is 50% of the commercial rates bill for eligible businesses with a 2023 bill of less than €10,000.

The grant is €5,000 for eligible businesses with a commercial rates bill of between €10,000 and €30,000.

Businesses, however, with a commercial rates bill over €30,000 are not eligible to receive this ICOB Grant.

Please be aware that Public institutions and financial institutions will not be eligible for the grant, except for Credit Unions and specific post office services.

Vacant properties will also not be eligible for the ICOB Grant.

It is important to keep in mind that this ICOB Grant is not a Commercial Rates waiver. Rateable businesses are still required to pay their commercial rates to their local authority.

Today, the Government issued two important updates concerning the Increase in Grant Scheme (ICOB):

• They specifically targeted businesses in the Retail and Hospitality sectors. Businesses operating within these sectors are now eligible for a second grant payment which is equivalent to the initial ICOB Grant amount.

• The closing date for eligibility confirmation which was 1st May 2024 has now been re- opened from 15^th May to 29^th May 2024.

Local Authorities are expected to begin paying out the ICOB Grant to eligible businesses in the coming weeks.

For further information, please follow the links:

https://www.mycoco.ie/icob

https://www.dlrcoco.ie/sites/default/files/2024-03/ICOB%20User%20Guide.pdf

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.

Corporation Tax Advice

Briefly, the Pillar Two rules include an Income Inclusion Rule and an Undertaxed Profits Rule . The Pillar Two rules provide that the income of large corporate groups is taxed at a minimum effective rate of 15% in all the jurisdictions in which they operate.  The Pillar Two rules will have no effect for groups below the €750m threshold. Those groups will continue to be liable to the existing Irish corporation tax rules.

Ireland has legislated for the Pillar Two rules with effect from:

• 1^st January 2024 for the Income Inclusion Rule (IIR) and
• 1^st January 2025 for the Under Taxed Profits Rule (UTPR)

These rules apply where the annual global turnover of the group exceeds €750m in two of the previous four fiscal years.

Ireland signed up to the OECD Two Pillar agreement in October 2021.

The new minimum tax rate, which is effective from the 1^st of January 2024, sees an increase from the previous corporate tax rate of 12.5% to 15%, for certain large companies.

Ireland will continue to apply the 12½% corporation tax rate for businesses outside the scope of the agreement, i.e. businesses with revenues of less than €750 million.

There are special rules for intermediate parent entities and partially owned parent entities as well as certain exclusions.

It is understood that Revenue estimates approximately 1,600 multinational entity groups with a presence in Ireland will come in scope of Pillar 2.

In addition, the EU Minimum Tax Directive (2022/2523) provides the option for Member States to implement a Qualified Domestic Top-up Tax (QDMTT).

A domestic top-up tax, introduced in Ireland from 1^st January 2024, allows the Irish Exchequer to collect any top-up tax due from domestic entities before the application of IIR or UTPR top up tax.

The QDTT paid in Ireland is creditable against any IIR or UTPR top up tax liability arising elsewhere within the group.

It is important to keep in mind that IIR or UTPR top up tax may not apply in relation to domestic entities in circumstances where the domestic top-up tax has been granted Safe Harbour status by the OECD.

As there will be separate pay and file obligations and standalone returns for IIR, UTPR and QDTT, Revenue guidance material will be provided, in due course, in relation to all administrative requirements.

For further information, please click: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32022L2523

Please be aware that the information contained in this article is of a general nature.  It is not intended to address specific circumstances in relation to any individual or entity. All reasonable efforts have been made by Accounts Advice Centre to provide accurate and up-to-date information, however, there can be no guarantee that such information is accurate on the date it is received or that it will continue to remain so. This information should not be acted upon without full and comprehensive, specialist professional tax advice.