Finance Bill 2024

The bill includes amendments across various tax categories, from income tax and USC changes to enhancements in reliefs for homeowners, renters, and businesses. Significant updates have also been made regarding environmental initiatives, including incentives for electric vehicles and renewable energy installations, in line with Ireland’s climate goals. Below is a detailed summary of the key provisions of the Finance Bill 2024, with a focus on income tax, business supports, and changes affecting sectors like agriculture and housing.

Jump to content

1. Income Tax
2. Charities and sports bodies
3. Pensions
4. Capital Gains Tax
5. Capital Acquisition Tax
6. Property
7. Stamp Duty
8. VAT
9. Excise
10. Miscellaneous measures

Income Tax

USC rates and bands

Section 2 of the Bill confirms the Budget Day announcement that the 4% USC rate will be reduced to 3% from 2025 onwards. The section also confirms the increase in the ceiling of the 2% USC rate from €25,760 to €27,382 from 1 January 2025, to ensure it remains the highest rate of USC paid by full-time minimum wage workers when the National Minimum Wage increases on 1 January 2025 to €13.50.

Income tax bands and credits

Section 3 of the Bill confirms the increase in the standard rate income tax band to €44,000 for single individuals and €53,000 for married couples/ civil partners (one earner) for 2025 onwards.

It also reflects the increase in the Personal Tax Credit, Employee Tax Credit and Earned Income Tax Credit on Budget Day to €2,000 for the tax year 2025 onwards.

This section also confirms that the Home Carer Credit will be increased to €1,950, the Single    Person Child Carer Tax Credit will be increased to €1,900, the Incapacitated Child Credit will be increased to €3,800, the Blind Person's Tax Credit will be increased to €1,950 and the Dependent Relative Tax Credit will be increased to €305 from 2025 onwards.

Section 4 of the Bill confirms the extension of the Sea-going Naval Personnel Credit to 31 December 2029. The value of the credit remains unchanged at €1,500.

Rent Tax Credit

Section 5 of the Bill amends the Rent Tax Credit to increase the credit to €1,000 for individual renters, or €2,000 per year per jointly assessed married couple or civil partners, in the private rented sector, who are not in receipt of other State housing supports, for the tax years 2024 and 2025. The definition of 'specified amount' has been updated in line with the increase to the credit. 

Mortgage Interest Relief

Section 6 of the Bill extends the temporary one-year tax credit available under section 473C TCA 1997 for taxpayers with an outstanding mortgage balance on their principal private residence (PPR) of between €80,000 and €500,000 as of 31 December 2022. This section confirms the Budget Day announcement of a one-year extension of this temporary credit.

In line with existing conditions of the relief, the taxpayer must be compliant with Local Property Tax (LPT) requirements. Mortgage Interest Relief is available at the standard rate of income tax of 20%. It will be available in respect of the 2024 tax year on the increase in interest paid in 2024 over the interest paid in 2022.

The amount qualifying for relief is capped at €6,250 per residence which is equivalent to a maximum tax credit of €1,250. To claim Mortgage Interest Relief, the taxpayer must file a tax return. The relief will operate by way of a credit offset against the taxpayer’s income tax liability in 2024. 

Help to Buy scheme

In his Budget 2025 speech, Minister Chambers announced an extension to the Help to Buy Scheme to the end of 2029, providing relief at the current rates (i.e., the lesser of €30,000 or 10% of the purchase price of the new home or self-build property as provided for in section 477C TCA 1997). This extension is confirmed in section 7 of the Bill. This section also amends the definition of ‘qualifying residence’ so that certain properties purchased by a Local Authority for onward sale to an affordable purchaser are not excluded from the scheme. 

Small Benefit Exemption

As announced by Minister Chambers on Budget Day, the annual limit for the Small Benefit Exemption will increase from €1,000 to €1,500 and the number of non-cash benefits that an employer can give their employees will increase from two to five benefits per year (the cumulative total of the first five benefits in a year cannot exceed €1,500). These amendments to the Small Benefit Exemption are confirmed in section 8 of the Bill and apply for the year of assessment 2025 and subsequent years.  

In addition to the above, section 8 of the Bill inserts a new subsection 3 into section 112B TCA 1997 to provide for a sunset clause such that the Small Benefit Exemption will cease for the 2030 tax year and subsequent years.  

In his Budget 2025 speech, the Minister noted the changes to the Small Benefit Exemption will provide greater flexibility to employers. It means workers may receive up to three additional tax-free rewards or gifts, for instance to reward exceptional performance, or mark significant life events.

BIK treatment of Battery Electric Vehicle (BEV) home chargers

Section 9 of the Bill confirms the Budget Day announcement to provide for an exemption from BIK in circumstances where an employer incurs an expense in providing a facility for the electric charging of vehicles at the home of a director or an employee. In addition, the section includes an exemption from BIK where facilities for the charging of electric vehicles are provided on a business premises where all employees and directors can avail of such facilities. 

Benefit-in-Kind (BIK) for company vehicles

Sections 10 and 11 of the Bill confirm the extension, to 31 December 2025, of the temporary universal relief of €10,000 applied to the original market value (OMV) of a vehicle. This applies to vehicles including vans, Electric Vehicles (EVs) and vehicles in Category A-D in order to reduce the amount of BIK payable. The sections also extend the lower limit of the highest mileage band, so that the highest mileage band is entered into at 48,001km.

For EVs, the OMV deduction of €10,000 is in addition to the existing relief of €35,000 currently available for EVs, meaning that the total relief for 2024 is €45,000. The current reduction of €35,000 in OMV will continue to apply for all EVs until the end of 2025, followed by a reduction of €20,000 in 2026 and €10,000 in 2027.  

Split year residence

Section 23 of the Bill amends section 822 TCA 1997 in relation to Split Year Residence. It provides that the treatment in the section will apply for the year of arrival or departure (as appropriate) in cases where it is not sought by the resident individual during the year and where the individual is resident (in arrival cases) or not resident (in departure cases) for the following year of assessment. The amendment is to apply for the year of assessment 2026 and subsequent years and to first apply to cases where an individual arrives in or departs from the State on or after 1 January 2025, according to the Explanatory Memorandum.

The Institute has engaged with Revenue on several occasions over the last year on the ‘in-year’ notification requirement in section 822 and on members’ experiences of submitting Split Year Residence claims. We will seek further clarity on the Finance Bill amendment.

Professional Services Withholding Tax (PSWT)

Section 22 of the Bill amends Schedule 13 TCA 1997 which lists the entities that are accountable persons for the purposes of PSWT. The amendments remove five entities that are no longer accountable persons required to operate PSWT. These are Ervia, A Referendum Commission established by order made under section 2(1) of the Referendum Act 1998, Director of the Equality Tribunal, Commission for Aviation Regulation and Broadcasting Authority of Ireland at paragraphs 40, 92, 111, 128 and 180, respectively. 

The section makes an amendment to update the name of the entity included at paragraph 140 from The Personal Injuries Assessment Board to the Personal Injuries Resolution Board. 

Finally, the section adds three entities: Maritime Area Regulatory Authority, An Rialálaí Agraibhia and An Ghníomhaireacht um Fhoréigean Baile, Gnéasach agus Inscnebhunaithe at paragraphs 215, 216 and 217, respectively.

Exemption in respect of certain payments made under employment law  

Section 24 of the Bill amends section 192A TCA 1997 which provides for an exemption from income tax for awards or settlements made as a result of an infringement of an employee’s statutory rights. The exemption applies where a claim is made under a ‘relevant Act’ following a hearing before a ‘relevant authority’. The Finance Bill amendment removes three entities from the definition of ‘relevant authority’. These are: a rights commissioner, the Director of the Equality Tribunal and the Employment Appeals Tribunal, as they are no longer operating or issuing determinations in respect of employment law.

Exemption in respect of annual allowance for reserve members of the Garda Síochána

Section 25 of the Bill updates section 204A TCA 1997 which provides for an exemption from income tax for an annual allowance payable to members of An Garda Síochána under Garda Síochána (Reserve Members) Regulations. The relevant Regulation is updated to refer to Regulation 14 of the Garda Síochána (Reserve Members) Regulations 2024 (S.I. No. 64 of 2024).

Assessment of tax due

Section 26 of the Bill amends the time limit for making or amending of an assessment by a Revenue officer under section 990 TCA 1997. The amendment provides that the four-year time limit shall commence at the end of the year following the year of assessment in which the employer return for an income tax month is made. Previously, the four-year time limit commenced at the end of the year following the year of assessment in which the income tax month falls. This amendment is effective for all income tax month returns from 1 January 2025. 

Provisions relating to members of Disabled Drivers Medial Board of Appeal

Section 27 of the Bill inserts a new section 195E into Chapter 1 of Part 7 TCA 1997. This section provides for an exemption from income tax. The exemption applies to payments made on or after 1 November 2023 to members of the Disabled Drivers Medical Board of Appeal (DDMBA) in respect of expenses for travel and subsistence incurred by members in attending meetings of DDMBA. The exemption only applies to payments that do not exceed civil service rates for travel and subsistence. 

Section 28 of the Bill amends the definition of ‘relevant payment’ for the purpose of PSWT in section 520 TCA 1997. The amendment adds ‘a locum cover payment’ within the meaning of section 986(4A) made on or after 1 November 2023 to the list of payments that are excluded from the definition of ‘relevant payment’ for PSWT. As a result, members of the DDMBA are not obliged to deduct PSWT from locum cover payments.  

A member of the DDMBA may engage a locum in their place to perform their normal duties in their medical practice while the member is attending meetings of the DDMBA. Any payment made by the Minister for Finance to contribute to the cost borne by the member of engaging a locum would be a ‘locum cover payment’. Section 29 of the Bill amends section 986 TCA 1997 by inserting a new subsection 4A which includes the definition of ‘locum cover payment’ and provides that PAYE shall not be applied to locum cover payments made to members of the DDMBA on or after 1 November 2023.

Relief for CervicalCheck payments

Section 30 of the Bill makes a number of amendments to introduce exemptions from income tax, CGT and CAT for payments made to the women impacted by the failures in the CervicalCheck national screening programme. It inserts a new section 205C into the TCA 1997. The section confirms the Budget day announcement that both future and historic income or gains arising from the investment of CervicalCheck payments are exempt.  

This section also makes necessary amendments to section 256, 267, 613, 730GA and 739G TCA for exemptions from DIRT, CGT and exit tax. These exemptions apply retrospectively from 1 September 2008.  

In addition, this section amends section 82 of the Capital Acquisitions Tax Consolidation Act (CATCA) 2003 to provide for an exemption from CAT. The amendment to section 82 is deemed to have come into operation on 11 March 2019. If the payment referred to in the new paragraph (bc) of section 82 CATCA 2003 was made at any time in the tax years 2019 or 2020, reference to the making of a valid claim within 4 years is a reference to 4 years commencing on 31 December 2021. 

Relief for Stardust ex gratia payments

Section 31 of the Bill inserts a new section 205D into the TCA 1997 to provide for an exemption from income and CAT for payments made under Phase 1 of the Stardust ex gratia payment scheme. These exemptions apply from 9 August 2024.

Farming: Stock relief   

Section 38 of the Bill legislates for the Budget day announcement to extend the stock reliefs available for farmers under sections 666, 667B and 667C TCA 1997 to 31 December 2027. These relate to general stock relief, stock relief for Young Trained Farmers and stock relief for Registered Farm Partnerships. 

Repeal of certain provisions in Part 23 (Farming and market gardening)

Section 39 repeals a number of provisions in Part 23 of the TCA 1997 which are considered obsolete. These are:

• Section 657A – Taxation of certain farm payments
• Section 657B – Restructuring and diversification aid for sugar beet growers
• Section 669A to 669F - Milk quotas

Accelerated Capital Allowances – Farm safety equipment

Section 40 of the Bill amends Part 2 of Schedule 35 TCA 1997, Types and Descriptions of Qualifying Equipment for the Purposes of Section 285D to extend the list of items that qualify for accelerated capital allowances for farm safety equipment and adaptive equipment for farmers with disabilities. The following items have been added: fixed sheep handling units; fixed cattle crushes or cattle crush races; calving gates; flood lights for farmyards; livestock monitors; sliding doors or roller doors for agricultural buildings.

Production, maintenance and repair of certain musical instruments - EU de minimis Regulation

Section 34 of the Bill amends section 216F TCA 1997 to amend the definition of the EU de minimis Regulation to the Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid and a number of consequential amendments. 

Finance Act 2022 introduced section 216F to provide that certain profits resulting from the production, maintenance and repair of early Irish harps, Irish lever harps and uilleann pipes should be exempt from income tax, up to a maximum of €20,000 for the tax years 2023 to 2025.

Section 34 also amends the definition of the EU de minimis Regulation in section 486C TCA 1997, which provides relief for certain start-up companies, covered in more detail below.

Exemption from income tax and CGT for certain bodies

Section 43 of the Bill makes amendments to Schedule 4 and Schedule 15 of the TCA 1997. Schedule 4 TCA 1997 lists specified non-commercial state-sponsored bodies that are exempt from income tax and corporation tax under section 227 TCA 1997. The following entities are added to Schedule 4: The Health Insurance Authority, The Health Products Regulatory Authority and Skillnet Ireland Company Limited by Guarantee at paragraphs 45B, 47B and 91C, respectively. The Irish Medicines Board, paragraph 57, is removed from Schedule 4.  

Schedule 15 TCA 1997 lists bodies that are exempt from capital gains tax under section 610 TCA 1997. This Schedule is amended to include Inland Fisheries Ireland at paragraph 51. The amendment to Schedule 15 is deemed to be effective from 1 July 2010.

Back to top

Charities and sports bodies

Donations to sports bodies

Section 20 of the Bill amends section 847A TCA 1997 which provides tax relief for relevant donations to approved sports bodies for the funding of certain projects. Currently, the method of granting tax relief for donations depends on whether the donor is a self-assessed individual, a PAYE-only taxpayer, or a company. 

In relation to individuals:

• A self-assessed individual taxpayer can claim a deduction in respect of the donation   made to an approved sports body on their income tax return.
• A PAYE-only taxpayer is not entitled to an income tax deduction in respect of the relevant donation made to an approved sports body. Instead, the approved sports body is deemed to have received the payment net of income tax and it is entitled to claim a refund of the income tax deducted after the donation has been re-grossed at the donor’s marginal rate. The PAYE-only donor must provide the sports body with a completed ‘appropriate certificate’ to allow the body to claim a refund of tax on the donation. 

The amendment to section 847A means that individuals, irrespective of whether they are self-assessed or PAYE taxpayers, can elect to obtain a deduction for a relevant donation against their total income or surrender the relief to the approved sports body (provided the donation(s) is at least €250). The Bill provides that Revenue may make regulations for the purposes of setting down the conditions under which an individual shall make the election.

The amendment applies for the year of assessment 2025 and subsequent years of assessment.

Donations to National Governing Bodies (NGB)

Section 21 inserts a new section 847AA into the TCA 1997 to provide for a scheme for tax relief on donations to certain NGB where the donations are used to fund projects to purchase certain sporting equipment, to support elite athletes in competitive sport and to support the participation of women and people with disabilities in sport. The relief will operate in a similar manner to section 847A, as amended by Finance Bill 2024. 

Relief will also be available to a company that makes a relevant donation to a NGB. Relief to a company will be by way of a deduction against total income.

Approved charities, promotion of athletic/amateur sports and NGBs

Section 16 of the Bill amends the Charitable Donations Scheme, so that charities will no longer need to be established for at least two years to access the scheme. Where a charity has merged or restructured into another entity, the condition that the predecessor entity must have been approved for two years no longer applies.  

Section 17 amends sections 207, 208 and 208A TCA 1997 to enable a charity to retain its tax exemption under the appropriate section provided that it applies its income to charitable purposes by the end of the fifth year after the year in which the income is received. An extension on this period may be provided if the charity can satisfy Revenue that it is in the process of applying the funds for charitable purposes.  

Section 18 amends section 235 TCA 1997 which relates to bodies established for the promotion of athletic or amateur games or sports to extend the definitions in the section to a new section 235A and correct some drafting errors and references.

Section 19 inserts a new section 235A TCA 1997 to provide that certain National Governing Bodies (NGB) can have an exemption for income which it invests for up to 10 years. The exemption applies provided the income is ultimately applied for certain qualifying purposes, outlined in the section. The relief applies to an approved sporting body (as defined in section 235(1)) which is recognised by Sport Ireland as a NGB with a ‘type C’ Code of Governance and which has tax clearance. In addition, DIRT paid will be refundable for deposits held by the NGB

Bank to top

Pensions

Employer contributions to PRSAs and PEPPs

Section 12 of the Bill amends seven sections of the TCA 1997 to limit the tax relief available for employer contributions to Personal Retirement Savings Accounts (PRSAs) and Pan-European Pension Products (PEPPs).

Section 118 TCA 1997 provides for a charge to income tax where certain BIK are provided for a director or employee. Finance Act 2022 amended section 118 to exempt employer contributions to a director’s or employee’s PRSA or PEPP from BIK. 

Section 12 of the Bill amends section 118(5) to specify that the exemption of the BIK charge from expenses incurred in the making of any contribution to a PRSA or PEPP will only apply to contributions up to an ‘employer limit’ as defined in sections 787A and 787V TCA 1997. Any contributions above the ‘employer limit’ will be considered a BIK for the director or employee and therefore subject to tax. 

Sections 787A and 787E TCA 1997 are amended to insert a new definition of ‘employer limit’ of 100% of an employee’s salary in the year of assessment, which will apply to employer contributions to a PRSA. The definition of employee in section 787A includes an employee and a director.

Sections 787V and 787Z TCA 1997 are similarly amended to insert a new definition of ‘employer limit’ of 100% of an employee’s salary in the year of assessment, which will apply to employer contributions to a PEPP. The definition of employee in section 787V includes an employee and a director.

In respect of both a PRSA and a PEPP, where the salary for the year of assessment is lower than the salary for the previous year of assessment (from the same employer) by virtue of the receipt of a benefit paid under the Social Welfare Consolidation Act 2005 to which section 126 applies, a period of unpaid leave approved by the employer or director, or a period of sick leave at a reduced rate of emoluments or in respect of which no emoluments are paid by the employer, then the ‘employer limit’ will be 100% of the employee’s salary for the previous year of assessment.

Sections 787J and 787AD TCA 1997 are amended to provide that an employer’s contributions to a director’s or employee’s PRSA or PEPP will be an allowable deduction in calculating the employer’s taxable profits up to the new ‘employer limit’. Therefore, a deduction will not be allowable for any contributions exceeding the ‘employer limit’.

Standard Fund Threshold (SFT)

Section 13 of the Bill provides for a number of changes to the operation of the SFT, based on recommendations from the report titled, Examination of the Standard Fund Threshold, published last month.

Following the publication of the report the Minister announced a multi-year plan to implement its recommendations. We covered the Minister’s announcement in more detail in TaxFax on 20 September. The following recommendations from the report have been legislated for in this year’s Finance Bill.

Increase to the level of the SFT

The Bill amends section 787O TCA 1997 to increase the level of the SFT on a phased basis by €200,000 per year beginning in 2026 until 2029, resulting in a SFT of €2.8 million, and then converging the level of SFT with the applicable level of growth, in line with the recommendations from the report. 

A new definition has been inserted into section 787O for ‘quarterly estimate average weekly earnings’ to mean the quarterly estimate average weekly earnings contained in the Central Statistics Office (CSO) Earnings, Hours and Employment Costs Survey (EHECS). Therefore, in 2030 the SFT will be the higher of €2.8 million or an amount adjusted in line with the EHECS. The adjusted amount is based on the difference in the quarterly estimate for average weekly earnings between quarter 1 of 2025 and quarter 3 of 2029. 

In 2031 and subsequent years, the SFT will be the higher of the previous year’s SFT, or an amount adjusted in line with the EHECS. The adjusted amount is based on the difference in the quarterly estimate for average weekly earnings between quarter 3 of the previous year, and quarter 3 of the year before the previous year.

Amend the standard chargeable amount

At present, the ‘standard chargeable amount’, which is the portion of a lump sum that is taxed at the standard rate of income tax of 20%, is calculated as the difference between 25% of the SFT (currently €2 million; 25% of which is €500,000) and the tax-free amount of €200,000. This gives a current standard chargeable amount of €300,000. Therefore, under the current legislation where the SFT increases, the standard chargeable amount would also increase by 25% of the increase in the SFT.

To address this, the Bill amends section 790AA TCA 1997 to amend the definition of ‘standard chargeable amount’ to mean €500,000 less the tax-free amount (currently €200,000).

Limit of tax-relieved pension funds

When a pension benefit is crystallised, broadly speaking, if the SFT is exceeded, the excess over the threshold, known as the “chargeable excess”, is subject to an upfront, ring-fenced income tax charge, on top of the normal taxes at the marginal rate due on drawdown of the pension funds. This tax is known as the chargeable excess tax (CET) and is charged at a rate of 40%.

The Bill amends Schedule 23B TCA 1997 to provide that transfers from PRSAs to vested PRSAs are considered a benefit crystallisation event (BCE), which means an individual will have a CET liability if their pension entitlements exceed the SFT as of that event.

Automatic Enrolment Retirement Savings System

The Automatic Enrolment Retirement Savings System Act 2024 provides for the new Auto-Enrolment Retirement Savings System (or AE scheme), which is a new retirement savings scheme for people without a work or private pension. Employees will automatically be enrolled in the scheme once they are aged between 23 and 60, earn more than €20,000 per year, and are not currently paying into a work or private pension through payroll. An individual will have the option to opt-out after 6 months from the date of their automatic enrolment in the scheme 

In a press release this week, the Minister for Social Protection, Heather Humphreys T.D. confirmed she signed commencement order S.I. No. 500/2024 on 30 September, which provides for the Auto Enrolment system, to be called My Future Fund, to begin on 30 September 2025. Minister Humphreys also confirmed that Government approval has been secured for the establishment of the National Automatic Enrolment Retirement Savings Authority (NAERSA) on 31 March 2025.

Section 14 of Finance Bill 2024 provides for the taxation and relief rules for the AE scheme by inserting a new Chapter 2E into Part 30 of the TCA 1997, comprising five new sections.

The Bill introduces a new section 787AF TCA 1997 to provide that employer contributions to the AE scheme will be exempt from tax. The employer contributions will be allowed as an expense of management or as a trading deduction. A new section 787AG TCA 1997 provides that a repayment of employer contributions, as a result of an overpayment of contributions, will be treated as a receipt of that trade.

The Bill introduces a new section 787AH TCA 1997 to provide that income and gains of AE funds, while held by an AE provider, will be exempt from tax.

The Bill introduces a new section 787AI TCA 1997 which provides for the taxation of payments from the AE scheme on drawdown, except for a 25% lump sum. The lump sum will be tax free up to €200,000; taxed at 20% between €200,000 and €500,000 and taxed at 40% above €500,000. As the State will make direct contributions for employees within the AE scheme, no tax relief will be available for employee contributions to the AE.

Section 15 of the Bill contains a number of auxiliary amendments dealing with the AE scheme which are made to the TCA 1997 and the Stamp Duties Consolidation Act (SDCA) 1999.

The provisions amended include:

• Section 118 TCA 1997 is amended to provide that an employer contribution to AE is removed from the charge to BIK.
• A new section 192Q is inserted into the TCA 1997 to provide that a State contribution to the AE system shall be exempt from income tax and USC.
• Section 246 TCA 1997 is amended to exclude from the obligation to withhold tax from payments of yearly interest, as provided for by section 246(3), payments of interest to and payments of interest from An tÚdarás Náisiúnta um Uathrollú Coigiltis Scoir (“the Authority”).
• Section 256(1) TCA 1997 is amended to provide that the Authority will not be liable to Deposit Interest Retention Tax (DIRT) on any deposit interest earned on deposits of the AE contributions.
• Section 608 TCA 1997 is amended to provide that gains arising from the disposal of investments held as part of specified superannuation funds includes gains arising on the disposal of units held in an AE Provider Scheme, which are therefore exempt from CGT. 
•  Section 706 TCA 1997 is amended to provide that the premiums payable under contracts with an AE provider scheme are to be attributed to the pensions business of an assurance company. 
• Section 739D TCA 1997 is amended to provide that a gain is not treated as arising to an investment fund on the happening of a chargeable event in respect of a participant in AE where, immediately before the chargeable event, the Authority has made a declaration to an investment undertaking. 
• Section 787O TCA 1997, which is amended by inserting a number of new definitions for the purposes of bringing AE within the scope of Chapter 2C and Schedule 23B, for the purposes of calculating a benefit crystallisation event; 
• Section 790AA TCA 1997 is amended to provide for the inclusion of payments from AE within the scope of a ‘relevant pension arrangement’, for the purposes of calculating an individual’s limit on lump sum payments. 
• The SDCA 1999 is amended in section 82C to bring an AE provider scheme within the scope of the definition of a ‘pension scheme’.

Sections 14 and 15 are subject to a commencement order to be made by the Minister for Finance.

II, SURE and SCI

Section 37 of the Bill makes several amendments to Part 16 TCA 1997 in respect of Relief for Investments in Corporate Trades (RICT). Those reliefs include the Employment Investment Incentive (EII), the Start-Up Relief for Entrepreneurs (SURE) and the Start-Up Capital Incentive (SCI). 

The three reliefs are subject to a sunset clause and are due to expire on 31 December 2024. The three reliefs are considered a permissible State aid as they operate under the terms of the EU General Block Exemption Regulation (GBER). Section 37 of the Bill extends the three reliefs for a further two years to the end of 2026, at which point the GBER is due to expire.

EII

The Bill amends the EII scheme to increase the limit on the amount that an investor can claim relief for such investments to €1,000,000 per year of assessment from 1 January 2025. Currently, the maximum investment on which a taxpayer can claim relief is €500,000 per year of assessment where the EII shares are held for a minimum period of 4 years.

As set out in our Special Budget 2025 TaxFax last week, the Department of Finance and Revenue had confirmed over the summer that the Minister for Finance was considering amendments to the legislation relating to follow-on investments following re-examination of the revised GBER. The current provisions allow for a rate of 20% for all follow-on investments. 

The Bill amends section 502 to increase the rate of relief which applies to follow-on investments to 35% for investments made within the 7/10-year eligibility period, with 20% applying thereafter. This amendment applies in respect of shares issued on or after 1 January 2024. Section 502 is further amended to provide that the income tax relief available is subject to the maximum tax relief thresholds provided for under GBER. 

The Bill amends section 502(5) TCA 1997 which sets out conditions to be met by a company regarding increases in employment or expenditure on R&D+I. The conditions must be satisfied three years after the year in which the eligible shares are issued. Failure to satisfy the conditions will result in a partial withdrawal of the tax under the scheme.  

Currently, the requirement is that there is an increase in (a) both the number of employees and the total remuneration of employees, or (b) the expenditure on R&D+I. The amendment provides that a company will be deemed to have fulfilled the employment condition if they satisfy either of the employment tests, i.e., an increase in the number of employees or an increase in total remuneration. The amendment will apply in respect of shares issued on or after 1 January 2025. In our representations to the Department of Finance, the Institute had advocated for this provision to be amended as the requirement to increase both the number of employees and the total remuneration of employees can be problematic.

SURE

Section 37 of the Bill amends the SURE scheme to set out the level of relief that will apply to investments made by investors in line with GBER and to provide that the relief available may not exceed the maximum tax relief thresholds outlined in GBER.  

The Bill also increases the maximum relief available for SURE investments from €100,000 to €140,000 per year (i.e., an increase from €700,000 to €980,000 over 7 years).

Sections 508A and 508C are amended to extend the date by which Statements of Qualification and Statements of Qualification (SURE) may be issued from 4 months after the end of the year of assessment in which the shares were issued to 31 December in the year following the year in which the shares were issued.

There are also some technical amendments to sections 508Q and 508W to ensure the provisions of Part 16 operate as intended.

Participation Exemption for Certain Foreign Distributions

Section 50 of the Bill introduces a new section 831B into Chapter 2 of Part 35 of the TCA 1997 to provide for the introduction of a participation exemption for foreign distributions. 

Under the new rules, a company will have the option to claim the participation exemption or to continue to use existing tax-and-credit relief under Schedule 24, by way of an election in its annual corporation tax return. Where a company elects to claim the participation exemption for an accounting period, it must do so for all distributions potentially in scope of the exemption in that period. The participation exemption will be available for relevant distributions received on or after 1 January 2025 from subsidiaries in EU/EEA and tax treaty partner source jurisdictions. 

Throughout this year, the Institute has been actively engaging with the Department of Finance in relation to the introduction of a participation exemption, including discussions at a subgroup of the Business Tax Stakeholder Forum (BTSF), which was convened to discuss the policy development of the participation exemption. We provided written feedback to the Department of Finance in August in advance of the publication of the second Feedback Statement. Two Feedback Statements were published by the Department on the implementation of a participation exemption for foreign dividends which the Institute responded to in May and September.

The Institute will carefully consider the provisions of this new legislation in conjunction with our TALC Representatives over the coming days and we will engage with Revenue and the Department of Finance to highlight any concerns with section 50 of the Bill.

We have outlined below some of the key elements of the participation exemption for foreign distributions.

Geographic Scope

The geographic scope of the participation exemption currently applies to distributions received from foreign subsidiaries resident in EU/EEA jurisdictions or jurisdictions with which Ireland has a double tax agreement (DTA). 

In our response to the second Feedback Statement in September we recommended extending the scope to include dividends paid by a company that is a constituent entity of the same Pillar Two group as the Irish recipient regardless of the location of the payor company. In his Budget 2025 speech, Minister Chambers confirmed work will continue in the coming year on further consideration of the geographic scope of the participation exemption. 

Parent company

A parent company means a company that holds a qualifying participation in a relevant subsidiary and is resident in the State or, if not resident in the State is resident for the purposes of foreign tax in an EEA state and is not generally exempt from foreign tax. 

Relevant territory 

A relevant territory includes an EEA State and jurisdictions with which Ireland has a DTA. It does not include a jurisdiction included on the EU list of non-cooperative jurisdictions for tax matters. 

Relevant subsidiary

A relevant subsidiary must, at the date the distribution is made and throughout the 5 year period prior to that date (the relevant period), be resident in a relevant territory. A relevant subsidiary must not be generally exempt from foreign tax. 

In the 5 years immediately before the date on which the distribution is made, the relevant subsidiary must not have, acquired another business, part of another business; or the whole or greater part of the assets used for the purposes of another business, where that business was carried on by a company which was not resident in a relevant territory. In addition, during the 5 year period, the relevant subsidiary must not have been formed through a merger, where a party to the merger was another company that was not resident in a relevant territory.

Relevant distribution

A relevant distribution must constitute income in the hands of the recipient and be made in respect of the relevant subsidiary’s share capital either (i) out of the profits (within the meaning of section 21B(1)(a) TCA 1997 of the relevant subsidiary; or (ii) out of the assets of the relevant subsidiary where the cost of the distribution falls on the subsidiary.  

In our response to the second Feedback Statement in September, we highlighted that the inclusion of the phrase ‘out of profits’ in the definition of relevant distribution, as drafted, would introduce similar complexity to the new participation exemption as the existing provisions in Schedule 24, as companies would be required to trace the year the profits from which a distribution is paid went through the income statement to satisfy themselves that the distribution was paid out of profits. 

Qualifying participation

A company shall be regarded as holding a qualifying participation in a relevant subsidiary where it:

• owns at least 5% of the ordinary share capital,  
• is beneficially entitled to at least 5% of the profits available for distribution to equity holders, and 
• would be beneficially entitled on a winding up to at least 5% of the assets available for distribution to equity holders. 

Subsection (2)(b) includes a requirement that a holding of ordinary share capital in a relevant subsidiary shall not be determined by reference to share capital held through an intermediary company that is not resident in a relevant territory.

Participation exemption

Subsection 3 sets out the exemption from corporation tax which will apply to relevant distributions. For the exemption to apply the parent company must hold at least 5% of the ordinary share capital of the relevant subsidiary for a continuous period of at least 12 months. In addition, where the distribution is made in respect of a relevant subsidiary’s share capital ‘out of the assets’ of the subsidiary, the exemption will only apply where any gain on the disposal of that share capital by the parent company on the date on which the distribution is made would not be a chargeable gain in accordance with section 626B TCA 1997. 

Anti-avoidance provision

Subsection 7 contains an anti-avoidance provision to address scenarios where an arrangement is put in place for purpose of obtaining a tax advantage and is ‘not genuine’ having regard to all the facts and circumstances. An arrangement will be regarded as ‘not genuine’ where it is not put into place for valid commercial reasons which reflect economic reality.

EU Minimum Tax Directive - Pillar Two  GloBE Rules

Section 115 of the Bill provides for a number of amendments to Part 4A of the TCA 1997 in relation to the EU Minimum Tax Directive (Council Directive (EU) 2022/2523 of 15 December 2022).

The EU Minimum Tax Directive was based on the Global Anti-Base Erosion Rules (GloBE), known as Pillar Two, developed by the OECD as part of its Two Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy.

The OECD published two additional sets of Administrative Guidance in relation to the operation of the Pillar Two GloBE Rules since Part 4A TCA 1997 was enacted in Finance (No.2) Act 2023, in December 2023 and June 2024. 

The Finance Bill 2024 amendments to Part 4A of the TCA 1997 address the following:

To incorporate elements of the December 2023 Administrative Guidance into primary legislation

These include:

• A number of amendments to section 111AJ TCA 1997 which provides for the Transitional CbCR Safe Harbour comprising the anti-avoidance provisions for 'hybrid arbitrage arrangements'.
• Insertion of a new section 111AKA TCA 1997 which outlines the rules to be used by eligible groups for non-material constituent entities to be applied under the Simplified Calculations Safe Harbour.
• Amendments to section 111AAF TCA 1997 in relation to the specified return dates and registration notification dates.

To incorporate elements of the June 2024 Administrative Guidance into primary legislation

These include: 

• Amendments to section 111X TCA 1997 regarding the application of a number of rules relating to deferred tax.
• Amendments to section 111Z TCA 1997 to provide for the allocation of certain covered taxes to a constituent entity that is a hybrid entity or a reverse hybrid entity, and to allow for an election to exclude the allocation of certain deferred tax expenses and benefits to a jurisdiction.
• Amendments to section 111A TCA 1997 regarding the definition of 'hybrid entity' and to clarify the meaning of 'owner' of a flow-through entity.
• Amendments to section 111AAC TCA 1997 to provide for the domestic top-up tax liability in respect of a securitisation entity to be imposed on another constituent entity of the MNE group or, where the top-up tax liability cannot be otherwise collected, on the securitisation entity itself.

To provide further clarity on the existing Part 4A legislation

These include:

• Amendments to section 111X TCA 1997 regarding the order of utilisation when determining the total deferred tax adjustment amount for a fiscal year in relation to a loss deferred tax asset.
• Amendments to section 111AAB TCA 1997 to provide that standalone investment undertakings, as defined in section 246 TCA 1997, are not chargeable to the domestic top-up tax.
• Amendments to section 111AAD TCA 1997 in relation to the calculation of domestic top-up tax in order to clarify the operation of this provision.

Section 115 of the Bill also includes a number of technical adjustments to Part 4A to ensure that the Pillar Two legislation operates as intended.

Institute Representations 

The Institute has been actively engaging with Revenue on the implementation of the Pillar Two GloBE Rules, via the TALC BEPS Sub-committee, including six submissions since the EU Minimum Tax Directive was transposed into Irish law in last year’s Finance Bill. We also included recommendations for legislative amendment to Part 4A TCA 1997 in our Pre-Finance Bill 2024 Submission to the Minister for Finance in May.

OECD Pillar One - Amount B

Section 45 of the Bill provides for amendments to Part 35A (Transfer Pricing) TCA 1997. Amount B of Pillar One of the Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy relates to the simplification of transfer pricing rules. Amount B sets out a simplified transfer pricing approach for the determination of the arm’s length amount of certain marketing and distribution arrangements.

In February, OECD/G20 Inclusive Framework members agreed to provide a political commitment in relation to ‘covered jurisdictions’ in respect of Amount B which would be provided for from 1 January 2025. This element is referred to as Phase One of Amount B.

Under the political commitment Inclusive Framework members have committed to respect the Amount B outcome determined under the Phase One rules, as outlined in the OECD Pillar One - Amount B guidance, if such an approach is applied by a covered jurisdiction with which there is a bilateral tax treaty in effect. These rules were approved by the Inclusive Framework and added as an Annex to the OECD’s Transfer Pricing Guidelines in February. The list of covered jurisdictions was finalised and agreed in June and includes 66 low and middle income countries as defined by World Bank Group country classifications.

The Bill introduces a new section 835DA into Part 35A TCA 1997 to provide for the political commitment in respect of Amount B of Pillar One. Where all of the conditions contained in the provision are satisfied, the arm’s length consideration in respect of a qualifying arrangement may be determined in accordance with the OECD Pillar One - Amount B guidance. The new section 835DA also provides for additional documentation requirements and includes anti-avoidance rules. 

Outbound Payments Defensive Measures

Section 817U TCA 1997, which was introduced in Finance (No.2) Act 2023, contains outbound payment defensive measures to prevent double non-taxation. The provisions apply to outbound payments of interest, royalties and distributions, including dividends, to associated entities situated in jurisdictions on the EU list of non-cooperative jurisdictions, and no-tax and zero-tax jurisdictions.

Section 46 of the Bill introduces a number of technical amendments to the definitions contained in section 817U. The reference to ‘foreign company charge’ in the definition of supplemental tax has been deleted. In addition, the reference in subsection 6 to ‘that is resident or situated in a different territory’ has been removed. The Explanatory Memorandum notes that the amendments are intended to remove unnecessary duplication in certain definitions and to ensure the legislation operates as intended primarily where payments are made to entities that are treated as transparent for tax purposes.

Interest Limitation Rule

Section 47 of the Bill amends section 835AY TCA 1997 which provides for the Anti-Tax Avoidance Directive Interest Limitation Rule. Three definitions in section 835AY are amended: ‘finance cost element of non-finance lease payments’, ‘finance element of finance lease payments’ and ‘finance income element of non-finance lease payments’. The updated definitions take account of changes introduced in Finance (No.2) Act 2023 to the classification of leases for tax purposes. A new subsection (4) is also inserted to clarify the treatment of amounts carried forward in a foreign currency.  This amendment is to ensure the legislation operates as intended.

Taxation of Leases 

Section 44 of the Bill provides for a number of amendments relating to the taxation of leases, mainly in sections 288, 299, 403 and 404 TCA 1997, along with other consequential amendments.

Section 288 TCA 1997 is amended to confirm the timing and value of balancing events for section 299 leases.

Section 299 TCA 1997 is amended to prevent the preclusion of corporate lessors from using section 299(4) computational rules in certain scenarios where the lessor acquired the asset from a member of the same group, provided certain conditions are met. The amendment confirms that section 299(4) computational rules can generally be applied where the lessor owns the asset immediately prior to letting.

The amendment also introduces new anti-avoidance criteria for lessors seeking to use section 299(4) computational rules. The Explanatory Memorandum notes that the new rules preclude the structuring of cross-border financing leases from Ireland where they generate excess relief for lease payments. Section 299(6) is deleted to streamline the anti-avoidance rules, and to ensure the anti-avoidance provisions in section 299(3)(c) generally apply to lessees of section 299 leases.

Section 403(1) TCA 1997 is amended to correct a typographical error in the amendments made by Finance (No.2) Act 2023. In addition, subsections (5A) to (10) are repealed as they are now obsolete and consequential amendments are made to remove cross-references to these subsections.

The Explanatory Memorandum notes that the amendments to section 404 TCA are intended to ensure that allowances arising from balloon leases in companies should only be available to set off against balloon leasing income in that company only. The amendment also clarifies that lessors that generally recognise their leasing income on an even basis for tax purposes do not fall within the scope of the balloon leasing ringfence. Specified reporting requirements for balloon leases are also introduced.

Relief for Certain Start-up Companies

Section 51 of the Bill amends section 486C TCA 1997, which provides relief for certain start-up companies, to extend the calculation of the relief by reference to the amount of Class S PRSI. 

Section 486C provides relief from corporation tax for certain start-up companies in the first five years of trading with an annual corporation tax liability of less than €40,000. Marginal relief is available to companies with a corporation tax liability of between €40,000 and €60,000. 

The relief provides for up to €40,000 per year against corporation tax liabilities to be carried forward where not fully used in the five years. The relief is currently calculated by reference to Employer PRSI paid of up to €5,000 per employee. This does not encompass PRSI paid by owner-directors. From 1 January 2025, the qualifying criteria will be extended to allow up to €1,000 of Class S PRSI per individual to count towards this cap. 

As outlined above, section 34 of the Bill amends section 486C to amend the definition of the EU de minimis Regulation to the Commission Regulation (EU) 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid.

R&D Tax Credit

Section 41 of the Bill amends subsection (6)(a)(i) of section 766C TCA 1997 (Research and development corporation tax credit) to reflect the increase in the amount of the first-year payment from €50,000 to €75,000, as announced by the Minister on Budget day. This change will apply in respect of claims made in accounting periods commencing on or after 1 January 2025.

Film Relief - Scéal Uplift

Section 48 of the Bill amends section 481 TCA 1997, which provides relief in the form of a corporation tax credit (the Film Tax Credit) for the qualifying costs of certain audio-visual productions, to enhance the relief to address specific challenges being faced by smaller feature film projects. 

Currently, the Film Tax Credit is granted at a rate of 32% of the lowest of: eligible expenditure; 80% of the total cost of production of the film; or €125 million. The amendment, provides for an enhanced tax credit, referred to as the Scéal Uplift, which provides an 8% uplift for certain feature film productions.

The enhanced credit will apply to feature films and animated films of feature length with a qualifying expenditure of less than €20 million and that meet certain qualifying criteria related to employment in key creative roles. The criteria will form part of the cultural certification administered by the Department of Tourism, Culture, Arts, Gaeltacht, Sport, and Media. For films that qualify on completion for the enhanced rate, the credit will be calculated at the rate of 40% on qualifying expenditure of less than €20 million.

As the incentive will form part of the Film Tax Credit, it will be subject to the same sunset clause of 31 December 2028. The commencement of the uplift will be subject to the receipt of State aid approval from the European Commission.

Tax Credit for Unscripted Productions

Section 49 of the Bill introduces a new section 487A into the TCA 1997 to provide for a tax relief for the unscripted production sector. The relief will take the form of a corporation tax credit for expenditure incurred on the production of an unscripted programme.

An unscripted programme means a non-fiction audiovisual work and can consist of either a single programme or a season, of a kind which is eligible for certification under the section. It must be produced on a commercial basis and wholly or mainly for exhibition to the public by means of broadcast on television or transmission on the internet. The unscripted programme must not be produced solely or mainly for exhibition as part of a promotional campaign or advertising for a specific product or undertaking, or as a commercial.

Qualification for the credit will be subject to a cultural test which will be administered by the Department of Tourism, Culture, Arts, Gaeltacht, Sport and Media, and certification will be required in advance of Irish production. The credit will be 20% of the lowest of: eligible expenditure, 80% of the total cost of production or €15 million.

The commencement of the credit will be subject to the receipt of State aid approval from the European Commission. The scheme will run until 31 December 2028.

Deduction for Stock Exchange Listing Expenditure

Section 42 of the Bill inserts a new section 81D into the TCA 1997 to provide for a tax deduction for expenditure incurred by a company wholly and exclusively in respect of a first listing on a stock exchange in the EEA. The relief will take the form of a corporation tax deduction for expenditure incurred wholly and exclusively for the purpose of admitting to trading the shares of a company on a regulated market or multilateral trading facility in an EEA State. 

The deduction will be available as a trading expense or, where the company is an investment company, as an expense of management under section 83 of the TCA 1997. A cap of €1 million will apply to the amount of the deduction. 

Expenses wholly and exclusively incurred for the purposes of the listing, both in the accounting period of listing and the previous three years, will be allowable, subject to the overall €1 million cap.

The deduction will be available in respect of listings that take place from 1 January 2025 to 31 December 2029.

The aim of this relief is to support businesses in the scale-up phase of their growth and development and encourage more stock exchange listings.

As outlined in our Special Budget 2025 TaxFax last week, the Minister has confirmed that in the coming year, and subject to State aid considerations, the Department of Finance will introduce a stamp duty exemption to enable Irish SMEs to access equity via financial trading platforms designed to support their funding needs.  

Accelerated Capital Allowances scheme for gas and hydrogen-powered vehicles.

Section 32 of the Bill extends the Accelerated Capital Allowances (ACA) scheme for gas and hydrogen-powered vehicles and refuelling equipment in section 285C TCA 1997 for a further year to 31 December 2025. This extension is to allow the Department of Transport time to review the scheme to ensure it meets the needs of the heavy transport sector as they address the challenge of decarbonisation.

Emission thresholds for vehicle capital allowances  

Section 33 of the Bill confirms the Budget day announcement that the CO2 thresholds for claiming capital allowances on business cars are being adjusted downward in light of improved vehicle emissions standards. The Bill amends sections 380L and 380M TCA 1997 to provide that from 1 January 2027, an expenditure of €24,000 will be allowable for cars with CO2 emissions of zero to 120g/km. A reduced amount of €12,000 will be allowable for vehicles with CO2 emissions of 121 to 140g/km. There will be no allowable expenditure for vehicles with emissions greater than 141g/km. The Bill provides that this provision will not apply in cases where a contract for hire of a car is entered into, and the first payment under that contract is made, prior to 1 January 2027. 

CFCs listed in Annex I of the EU list of non-cooperative jurisdictions.

Section 52 of the Bill amends section 835YA TCA 1997 which provides for defensive measures involving the disapplication of exemptions in sections 835T, 835U and 835V TCA 1997, against controlled foreign companies (CFCs) resident in jurisdictions listed in Annex I of the EU list of non-cooperative jurisdictions for tax purposes for an accounting period. The amendment provides that the EU list, as updated in February 2024, takes effect for CFCs resident in non-cooperative jurisdictions, with accounting periods beginning on or after 1 January 2025.   

Bank to top

Capital Gains Tax

CGT Retirement Relief

Section 55 of the Bill reflects an amendment to CGT Retirement Relief which Minister Chambers announced on Budget day. 

Finance (No.2) Act 2023 introduced changes to the relief including the introduction of a lifetime limit of €10 million on the value of assets qualifying for retirement relief, where the individual disposing of the assets to a child is aged from 55 to 69 years. This was to take effect from 1 January 2025. 

In Budget 2025, the Minister announced that he would provide for CGT relief on disposals to a child which are valued over €10 million provided the assets are retained for a 12-year period. This would apply in relation to the CGT liability arising in respect of:

• an individual aged 55 and over when transferring qualifying assets to a child;
• where the value of such assets exceeds the €10 million lifetime limit on CGT relief available in respect of such transfers; and
• the transfer(s) takes place on or after 1 January 2025.

The CGT liability due on the value of the assets exceeding the €10 million cap may be deferred or abated in certain circumstances, as outlined in the amendments proposed to section 599 relating to relief on disposals to a ‘child’, as defined in the section.

A claim to defer payment of the CGT in respect of a relevant disposal may be made in the return required for the year of assessment in which the disposal is made. Where the claim is made, deferred CGT in respect of the disposal shall not be due and payable until the earliest of (i) the date on which the qualifying assets compromised in the relevant disposal are disposed of by the child, or (ii) the date of expiry of the ‘retention period’ (the 12-year period) relating to the relevant disposal. 

Where the qualifying assets comprised in the disposal are disposed of before the expiry of the retention period, the deferred CGT in respect of such assets shall be assessed on the child for the year of assessment in which the child disposes of such assets. This is in addition to CGT on any gain accruing to the child on the disposal. 

Where the child retains ownership of the assets comprised in the relevant disposal for the duration of the retention period, on making a claim, the deferred CGT due can be fully abated. 

The section provides that a claim for relief, deferral or abatement, shall apply only in respect of a disposal of qualifying assets where it is reasonable to consider that the disposal of the assets is made for bona fide commercial reasons and does not form part of any arrangement or scheme the main purpose, or one of the main purposes, of which is avoidance of a liability to tax. 

CGT Relief for Angel Investors

Section 53 of the Bill repeals section 46 of Finance (No.2) Act 2023, which introduced CGT relief for angel investors, which has not yet been commenced, to be reinstated by section 54 of the Bill.

Section 54 of the Bill inserts a new Chapter 6A into Part 19 of the TCA 1997 to provide for a targeted CGT relief to encourage angel investment in innovative start-ups. The new Chapter 6A legislates for a CGT relief for third-party individuals, or qualifying investors, who acquire significant minority shareholdings in innovative start-up SME companies. It allows those investors to avail of a reduced rate of CGT on a sale to a third party.

The qualifying investment must be in a company whose relief group is no more than 7 years old. Where an individual invests directly in a qualifying company, a qualifying investment is an investment in newly issued ordinary shares costing a minimum amount of €20,000, or €10,000 where it amounts to at least 5% of the company’s share capital.

Where an individual invests in a qualifying company via a qualifying partnership, a qualifying investment is an investment by the qualifying partnership in newly issued ordinary shares costing a minimum amount of €20,000.

The shares acquired must be held for a minimum of 3 years. Relief is not available on a part disposal of eligible shares or on the redemption, repurchase or repayment of eligible shares. 

A reduced CGT rate of 16% is available on a gain of value equivalent to twice the value of the investor’s initial investment. An effective reduced rate of 18% applies to individuals who make the investment via a qualifying partnership. There is a lifetime limit of €10 million on gains that may avail of the reduced rate of CGT.

For a qualifying investment to be made a company must hold valid certificates of qualification and provide those certificates to the investor. A company may apply to Revenue to receive certificates of qualification, which are comprised of a certificate of going concern and a certificate of commercial innovation. 

As part of this certification process, Revenue may engage with Enterprise Ireland in order to ascertain if a company should be issued certificates of qualification. The company making an application, or a qualifying subsidiary of the company must be an innovative enterprise and demonstrate they have the experience and expertise to implement the business plan.

Revenue will establish and publish a register of the certificates of qualification issued. Qualifying companies in receipt of a qualifying investment must report certain details of the investment to Revenue and, further to requirements in the GBER, Revenue will publish those details.

The relief is subject to a sunset clause of 31 December 2026. Section 54 is subject to a commencement order to be made by the Minister of Finance.

Miscellaneous exemptions for certain kinds of property

Section 56 of the Bill amends section 613 TCA 1997 to provide that no chargeable gain shall arise in respect of disposals of registered and national monuments and archaeological objects in accordance with the Historic and Archaeological Heritage and Miscellaneous Provisions Act 2023.

Bank to top

Capital Acquisition Tax

Reporting of Interest-free and Low-interest Loans

Section 98 of the Bill amends the reporting requirement for gifts in respect of certain interest-free loans between close family members contained in section 46(4A) CATCA 2003. By removing the requirement in section 46(4A)(b) CATCA 2003 that the reporting obligation is triggered where no interest has been paid within 6 months of the end of the relevant period in which the gift is deemed to have been taken, the section has now broader application to specified loans with any element of a gift. The extended reporting requirement will come into operation on 1 January 2025.

CAT Group Thresholds

Section 99 of the Bill amends Part 1 of Schedule 2 of CATCA 2003 to increase the CAT Group Thresholds, with the Group A Threshold increasing from €335,000 to €400,000, the Group B Threshold increasing from €32,500 to €40,000 and the Group C Threshold increasing from €16,250 to €20,000. The increased Group Thresholds will apply to gifts or inheritances received on or after 2 October 2024.

Agricultural Relief

Section 100 of the Bill inserts a new section 89A CATCA 2003 detailing the agricultural relief provisions to apply to gifts and inheritances taken on or after 1 January 2025. The principal changes from the section 89 CATCA 2003 agricultural relief provision are to modify the active farmer test and to provide that the donor will be required to meet the 6-year active farmer test for the beneficiary to benefit from the relief. A transitional provision is included which gradually increases the length of time the donor is required to meet the farmer test by treating the 6-year period as commencing on 1 January 2025 and ending on the date of the gift or inheritance until 30 December 2030 when the full 6-year period will be required to be met.  

Section 89 CATCA 2003 provides relief from CAT, in certain circumstances, for gifts and inheritances of agricultural property by reducing the taxable market value of the gifted or inherited agricultural property by 90%. Currently, to qualify for the relief, the following qualifying conditions must be satisfied:  

• the assets received must constitute agricultural property, as defined by section 89.  
• on the valuation date, the beneficiary must satisfy the ‘80% agricultural property’ asset test after taking the assets.
• for 6 years from the valuation date, the beneficiary, or lessee where the beneficiary leases the agricultural property, must satisfy the active farmer requirements. 

The new section 89A CATCA 2003 provides greater flexibility as the active farmer requirement can be satisfied where part of the agricultural property is used for farming by an active farmer beneficiary and the remaining part of the agricultural property is leased to an active farmer lessee. The Explanatory Memorandum states that these revisions aim to facilitate more flexible use of the land and to ensure that the entirety of the agricultural property is used for the purposes of farming.  

The newly inserted section 89A CATCA 2003 provides that, in addition to the qualifying conditions above, for the 6-year period prior to the date of the gift or inheritance, the agricultural property must have been owned by the disponer who satisfies the active farmer requirement of being used for the purposes of farming by the disponer or a person to whom the property was leased. In terms of the ownership condition, there are specific provisions deeming an individual to be entitled in possession to agricultural property subject to a discretionary trust under or in consequence of a disposition made by the individual and allowing for replacement agricultural property within one year of the disposal, or 6 years where the disposal was a CPO, in similar terms to the section 89 CATCA 2003 provisions in respect of the beneficiary.   

Section 89(3) CATCA 2003 provides that where a benefit is taken subject to a condition it is invested in agricultural property, it will qualify for agricultural relief if the benefit is so invested within two years of the date of the gift/inheritance. This is not contained in the newly inserted section 89A CATCA 2003.  

In his Budget 2025 speech, the Minster confirmed this change is to address the increase in value of agricultural land above inflation which is making it difficult for genuine farmers to purchase the land they need for farming. 

Section 101 of the Bill contains a number of consequential amendments to the CATCA 2003 a result of the insertion of the new section 89A CATCA 2003 referred to above.  

Bank to top

Property

Vacant Homes Tax (VHT)

Section 113 of the Bill substitutes section 653AP Amount of Vacant Homes Tax with a new section. It confirms the rates of VHT to apply for chargeable periods beginning 1 November 2022 as:

• Three times the LPT payable for the chargeable period commencing 1 November 2022. 
• Five times the LPT payable for the period commencing 1 November 2023.
• Seven times the LPT payable for the period commencing 1 November 2024 and subsequent chargeable periods, as announced on Budget day. 

The amount of LPT payable is determined before inclusion of any Local Adjustment Factor. 

Residential Zoned Land Tax (RZLT)

Section 114 of the Bill amends Part 22A of the TCA 1997 which covers RZLT. A number of amendments are included in the Bill:

• Section 653I has been amended to provide a further opportunity for landowners whose land will appear on a revised map, to request a rezoning of the site (between 1 February and 1 April 2025) from the local authority where the land is located. The revised map is due to be published on 31 January 2025. The local authority shall acknowledge receipt of the submission no later than 30 April 2025 and will notify the landowner of the decision no later than 30 June 2025.
• A new section 653IA has been inserted to provide for an exemption (rather than a deferral) from the 2025 RZLT liability in respect of land appearing on a revised map to be published on 31 January 2025, where the owner has availed of the opportunity to request a rezoning under the amended section 653I. The exemption may not apply if the rezoning request relates to land that is the subject of a current planning application which proposes, or an extant planning permission which allows, residential development of the land.  
• Section 653O has been amended to provide that where planning permission is granted to part of a site, prior to it becoming a relevant site for RZLT purposes, then it will be treated as two separate relevant sites from the date the site becomes a relevant site, and the landowner will be required to register both relevant sites with Revenue.
• Section 635AF has been amended to provide for an exemption from RZLT (rather than a deferral) where development of a site may not be commenced because the planning permission is subject to a third-party judicial review application, or an appeal of a judicial review determination. The exemption will apply for the duration of the proceedings irrespective of the eventual outcome.
• A new section 653AGA has been inserted to provide for a deferral of RZLT for 12 months from the date of grant of planning permission, or until the land is sold to a third party, if earlier.
• Section 653AH is amended to provide for the 12-month deferral (from the date planning permission is granted) of the RZLT to continue where a site is transferred between group companies. Amendments are also introduced to provide for circumstances where part of a site, to which the provision applies, is sold and to determine the portion of deferred tax which becomes due and payable. Amendments are also made to ensure all relevant completed development is captured in the formula used for determining the percentage of completion of the development to which the deferral relates.
• Consequential amendments have also been made in respect of sections 653T, 653AD and 653AI TCA 1997.

Pre-letting Expenditure in respect of vacant premises

Section 35 of the Bill extends the current relief for pre-letting expenditure in respect of vacant premises under section 97A TCA 1997 for a further three years to 31 December 2027, as announced on Budget Day.

Residential Premises Rental Income Relief

Section 36 of the Bill amends section 480C to provide that relief will not be available where the landlord has an overall rental loss. The credit will be restricted to the lowest of (a) the credit amount (i.e. €600 for 2024, €800 for 2025 and €1,000 for 2026 and 2027), (b) 20% of the rental surplus from qualifying properties or (c) 20% of the landlord’s overall Case V profits.    

The provision for a clawback of relief where a person ceases to be a chargeable person in respect of any qualifying property owned during the first year of assessment has been amended to ensure the clawback does not apply solely due to the person’s death during a relevant year of assessment. 

The manner in which relief will be clawed back has been amended such that Revenue will raise an assessment for each year for which a tax credit was claimed. The Institute had sought in its Pre-Finance Bill 2024 Submission to the Minister for the clawback provisions to be amended to ensure any clawback is restricted to the relief granted.

Bank to top

Stamp Duty

Stamp duty on residential property valued above €1.5 million

Section 90 of the Bill amends Schedule 1 of the SDCA 1999 and introduces a third rate of stamp duty on residential properties to apply where the value/acquisition price exceeds €1.5 million. It applies at a rate of 6% on the balance of the consideration in excess of €1.5 million. 

The new 6% rate took effect from midnight on 1 October via Financial Resolution No.4. Transitional arrangements apply for transactions in process. The existing stamp duty rates will continue to apply to instruments executed before 1 January 2025 in respect of which a binding contract was in place before 2 October 2024. 

The existing 1% stamp duty rate on residential property with a value not exceeding €1 million, and 2% on any value between €1 million and €1.5 million will continue to apply. 

In a change from the text of the Financial Resolution, the new 6% rate is disapplied where three or more apartments in the same block of apartments are acquired. In such cases, the 1% rate will apply to consideration not exceeding €1 million and the 2% rate will apply to consideration exceeding €1 million. 

Increase in stamp duty on certain acquisitions of residential property

Section 90 of the Bill also amends section 31E SDCA 1999, which charges a higher rate of stamp duty on the acquisition of certain residential property where a person acquires at least 10 residential units during any 12-month period. The section confirms the increase in the higher rate of duty from 10% to 15%. 

Financial Resolution No. 4 provided for the increase with effect from midnight on 1 October. Transitional measures will apply to instruments executed before 1 January 2025 in respect of which a binding contract was in place before 2 October 2024.

Exclusion from higher rate of stamp duty on certain acquisitions of residential property for certain transfers from NAMA

Section 91 of the Bill amends section 31E SDCA 1999 by inserting a new subsection 12A. The new subsection provides that the transfer, on or before 31 December 2025, by the National Asset Management Agency (NAMA) or a NAMA group entity of shares in the National Asset Residential Property Services DAC to the Land Development Agency will not come within the scope of these provisions and will therefore not be liable to the higher rate of stamp duty. 

Young Trained Farmer Stamp Duty Relief

Section 81AA SDCA 1999 provides relief from stamp duty on the transfer of an interest in agricultural land to certain farmers who are under 35 years of age and who hold a relevant agricultural qualification (i.e. young trained farmers). Where the relief is claimed, the young trained farmer is required to spend at least 50% of his/her normal working time farming the land for 5 years.

Section 92 of the Bill reflects the Budget announcement that the relief is revised so that the working time condition can be satisfied where the young trained farmer farms the land through a company. The young trained farmer must spend not less than 50% of his or her normal working time farming the land as an employee of the company; hold not less than 20% of the ordinary share capital of the company; be a director of the company and have the ability to participate in the financial and operational decisions of the company.

Relief for Leases of Farmland

Section 92 of the Bill also confirms the Budget announcement that the stamp duty relief applicable to leases of farmland will be revised so that relief can be claimed where the farming business is carried on by a company. 

Relief may be claimed where the lessee is a company, in respect of which at least one individual holds not less than 20% of the ordinary share capital of the company, is a director, has the ability to participate in the financial and operational decisions of the company and is the holder of a relevant agricultural qualification. 

Section 92 confirms relief can be claimed by a company in certain circumstances and relief is available to a single undertaking within the meaning of Commission Regulation (EU) No. 1408/2013 only insofar as it does not exceed the ceiling of aid laid down in the Regulation.

Miscellaneous Stamp Duty and Banking Levies Modernisation

Section 93 of the Bill provides for the repeal of sections 94, 102, 114 to 122 and 125B of the SDCA 1999 which are obsolete. The section also amends section 100 SDCA 1999 to provide for the replacement in that section of references to 'Temple Bar Properties Limited' with 'Temple Bar Cultural Trust Designated Activity Company' which is the current name of that company. Finally, the section amends section 104 SDCA 1999 to provide that the exemption on certain licences and leases granted under the Petroleum and Other Minerals Development Act 1960 that is provided for under that section will not be available after 31 December 2029. 

Section 94 of the Bill amends sections 31A and 31B of the SDCA 1999 to provide that where a repayment of stamp duty is claimed under either of those sections, the general requirements of section 159A SDCA 1999 (General provisions on claims for repayment of stamp duty) must also be met.

Section 95 of the Bill amends section 123B SDCA 1999 which provides for stamp duty on cash, combined and debit cards. It also amends section 124 SDCA 1999 which provides for stamp duty on credit card accounts and on charge cards. The amendments clarify that a reference to a card in either section includes a reference to a card in electronic form. This section also amends section 124 SDCA 1999 in respect of credit cards and charge cards to provide that, from 2025, the stamp duty that is currently levied in relation to charge cards will be replaced with a stamp duty that is levied in relation to charge card accounts.

Bank Levy

Section 96 of the Bill confirms the revised Bank Levy, introduced in Finance (No.2) Bill 2023, will apply for 2025 and will be payable by banks which received State assistance during the banking crisis; namely AIB, Bank of Ireland, EBS and PTSB. The revised Bank Levy will be applied at the rate of 0.112% of the value of eligible deposits held by each bank on 31 December 2022. An eligible deposit has the same meaning as in the European Union (Deposit Guarantee Schemes) Regulations 2015 (S.I. No. 516 of 2015).

Bank to top

VAT

Increase in VAT registration thresholds.

Section 78 of the Bill provides for an increase to the existing VAT registration thresholds with effect from 1 January 2025. The registration threshold for businesses will increase from €40,000 to €42,500 for services and from €80,000 to €85,000 for goods.

Extension of 9% VAT rate for electricity and gas

Section 79 of the Bill provides for the temporary extension of the 9% VAT rate to gas and electricity supplies until 30 April 2025 as confirmed on Budget day. The second reduced rate of 9% for gas and electricity supplies was due to end on 31 October 2024. The temporary extension to 30 April 2025 came into effect as on and from 2 October 2024 via Financial Resolution No.2.

VAT rate on the supply and installation of heat pumps

Section 79 of the Bill confirms, with effect from 1 January 2025, the 9% VAT rate will apply to the supply and installation of low emission heat pump heating systems (currently subject to 23%).

Section 88 amends Schedule 3 of the VAT Consolidation Act (VATCA) 2010 to provide for the application of the 9% reduced rate to the supply and installation of low emission heat pump heating systems

VAT on costs incurred by another person acting under a power exercisable by them.

Section 80 of the Bill clarifies that an accountable person may not claim an input deduction in respect of VAT on costs incurred by another person acting under a power exercisable by them, including a receiver or liquidator.

Section 82 of the Bill clarifies that an input deduction is available in respect of VAT on costs incurred by another person acting under a power exercisable by them, including a receiver or liquidator, when fulfilling their obligation to furnish a VAT return.

General limits on deductibility

Section 81 of the Bill clarifies the limitation on input deductions not allowable on food, drink, accommodation or personal service.

Farmers’ Flat-Rate Addition

Section 83 of the Bill confirms the increase to the flat-rate addition for farmers from 4.8% to 5.1% from 1 January 2025, which was announced in the Budget. 

Penalties for Payment Service Providers

Section 84 of the Bill provides for the application of penalties where a Payment Service Provider (PSP) does not comply with its obligations under Part 9A of the VATCA 2010. From January 2024, a PSP is required to submit data on cross-border payments received by businesses from customers via the EU Central Electronic System of Payment Information (CESOP).

The Bill provides for a penalty of €4,000 per calendar quarter in which the PSP does not comply with the requirement to keep records and/or the reporting requirements under sections 85C, 85F and 85G VATCA 2010. A further penalty of €4,000 will apply for each subsequent calendar quarter during which the PSP fails to comply with these obligations. A PSP that fails to comply with the retention of records obligations in section 85E VATCA 2010 will be liable to a penalty of €4,000.

VAT exemption for management of EU Alternative Investment Funds

Section 85 of the Bill clarifies that the VAT exemption for the management of EU Alternative Investment Funds (AIFs) applies to the management of all EU AIFs including where the Alternative Investment Fund Manager (AIFM) is registered with a relevant competent authority.

Zero-rated goods and services

Section 86 of the Bill makes consequential amendments to Part 1 of Schedule 2 VATCA 2010 to remove paragraphs 4(1), 4(6), and 6(2)(c) following amendments made in Finance Act 2020. 

Section 87 of the Bill clarifies that the standard rate of VAT applies to juice extracted, or drinkable products derived, from fruit, vegetables, plants, grains, seeds or pulses, with effect from1 January 2025, by amending Table 1 of paragraph 8(1), Part 2 of Schedule 2, VATCA 2010.

Bank to top

Excise

Measures announced by the Minister in Budget 2025 are included in the Bill as follows:

• Sections 57-68 and Schedule 1 confirm the introduction of an excise duty on e-cigarettes subject to a commencement order. The tax will apply to all e-liquids at a rate of €500 per litre.
• Section 69 extends the Alcohol Products Tax (APT) relief for independent small producers of cider and perry to cover other fermented beverages, which includes products such as mead and wines, other than grape wine such as elderberry wine, strawberry wine etc., as well as to higher strength cider and perry. The relief reduces the standard rate of Alcohol Products Tax by 50%.
• Section 70 confirms the increase of €1 on a pack of 20 cigarettes, with a pro-rata increase on other tobacco products.
• Section 71 inserts new and revised terms to take account of changes put forward by the Gambling Regulation Bill 2024 as well as making amendments to retain the status quo in the application of Betting Duties and account for changes to the de minimis Aid Regulations. 
• Section 72 removes the requirement for betting to occur at a registered premises in order for a charge to duty to arise and replaces this provision with a condition that all bets placed by a person in the State with a licenced bookmaker, other than by remote means, are subject to duty.
• Section 73 substitutes the existing extension of betting duty to remote bookmakers with a new excise duty known as “Remote Betting Duty” chargeable on all bets placed by a person in the State with a licensed bookmaker where the bet is placed by remote means.
• Section 74 updates all references in Chapter 1 of Part 2 of Finance Act 2002 to the now repealed and replaced Commission Regulation (EU) No. 1407/2013 with the replacement Commission Regulation (EU) No. 2023/2831.
• Section 75 reduces by half the licence duty owing on the granting or renewal of excisable betting licences as well as on the registration of betting premises consequential on the Gambling Regulation Bill 2024 which will reduce the existing licence term from two years to one.
• Section 76 provides for emissions-based Vehicle Registration Tax (VRT) for category B vehicles registered on or after 1 July 2025 with a table setting out the CO2 emissions categories for the registration of vehicles and the corresponding percentage rates of VRT which are chargeable on the Open Market Selling Price of the vehicle. 
• Section 76 also provides for a change to the weight ratio from 130% to 125% for commercial electric vehicles in order to qualify for the €200 VRT rate with effect from 1 January 2025.

Bank to top

Miscellaneous measures

Reporting by platform operators

Section 103 of the Bill amends section 891J TCA 1997 in relation to the transposition of the OECD Model Rules for Reporting by Platform Operators, which were enacted into Irish law by Finance Act 2022. 

The amendments provide for the revocation of the Platform Operator ID by Revenue which has been assigned to a non-resident platform operator. The Platform Operator ID may be revoked by Revenue where they have issued two written reminders to the platform operator regarding its obligations and 30 days have elapsed since the second reminder issued. A Platform Operator ID will not be reinstated until the platform operator gives written assurance and documentary evidence to Revenue which satisfies them that the platform operator will comply with its obligations under the section.

Section 103 also outlines the restrictions that a platform operator must impose in cases where a reportable seller fails to provide the relevant information to the reporting platform operator. These include withholding payment and closing the reportable seller’s account with the platform operator.  

Joint audits

Section 104 amends section 891L which was inserted into the TCA 1997 by Finance (No. 2) Act 2023 following the transposition of Article 12A of DAC7 (i.e. the EU Directive on Administrative Cooperation) into Irish law. This introduces a common legal basis by which EU Member States are obliged to facilitate other Member States in conducting joint audits. 

The amendments in the Bill provide that the rights and obligations of a Revenue officer participating in a joint audit in a Member State, other than the State, shall be determined in accordance with the laws of the Member State where the joint audit takes place. A Revenue officer participating in a joint audit referred to above shall not exceed the scope of the powers conferred on such an officer by the law of the State. 

Debt Warehouse Scheme – Zero % interest rate

Sections 105 to 110 give effect to the zero percent interest rate on warehoused debt where taxpayers engaged with the Collector General’s Division by 1 May 2024, to make arrangements to pay their warehoused debt. The Bill also updates the relevant sections in legislation to provide for simple interest where a taxpayer fails to comply with their obligations under the Acts and under their payment agreement with Revenue.

Repayment of tax in the case of a ceased company

Section 111 of the Bill inserts a new section 826B into the TCA 1997 to provide that where a correlative adjustment or mutual agreement reached under section 826 TCA 1997 gives rise to a repayment of tax, subject to the satisfaction of all the relevant conditions, that the repayment of tax may be made to another group company in instances where the company that would have been entitled to the repayment has ceased to exist. 

The ceased company, immediately prior to ceasing to exist, must have been an effective 90% subsidiary of the group parent company. This amendment applies to repayments of tax arising from a correlative adjustment determination made by Revenue or mutual agreement reached on or after the date of passing of Finance Act 2024. 

Amendment to Schedule 24A

Section 112 of the Bill amends the list of international tax agreements entered into by Ireland in Part 1 and Part 3 of Schedule 24A TCA 1997. 

Part 1, Schedule 24A which lists existing Double Taxation Agreements, is amended to include a new Double Taxation Agreement with the Sultanate of Oman. S.I. No. 485/2024 - Double Taxation Relief (Taxes on Income) (Sultanate of Oman) Order 2024 was signed by the Taoiseach, Simon Harris T.D. on 18 September. 

Part 3, Schedule 24A which lists agreements in relation to the Exchange of Information and other matters relating to tax, is amended to include a Protocol to the existing Double Taxation Agreement with Jersey. S.I. No. 484/2024 - Double Taxation Relief (Taxes on Income) (Jersey) Order 2024 was signed by the Taoiseach, Simon Harris T.D. on 18 September.

These amendments to Schedule 24A will have effect from the passing of the Act and are the final step in the legislative and ratification procedure which will ensure that these agreements will have the force of law.

Technical amendments

Section 116 and Schedule 2 of the Bill refer to technical amendments. These include correction of references and minor drafting errors in the TCA 1997 and Finance Act 1992. Paragraph 3 of Schedule 2 amends Schedule 1 of SDCA 1999. The amendment replaces paragraph 5 in the heading “CONVEYANCE or TRANSFER on the sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance”. Paragraph 5 refers to Consanguinity Relief.

Section 116 provides that these changes shall have effect on and from the date of the passing of the Act with the exception of one change to Finance Act 1992 in relation to VRT which is deemed to have come into operation from 1 January 2022.

Bank to top