TALC meets to discuss Finance Bill 2025

The Tax Administration Liaison Committee (TALC) held several meetings last week to discuss Finance Bill 2025 and the draft clauses which will ultimately give effect to this year’s Budget announcements. The Institute, under the auspices of the Consultative Committee of Accountancy Bodies – Ireland (CCAB-I), attended these meetings supported by the representatives of the CCAB-I’s Tax Committee South.

On Tuesday and Wednesday, the TALC BEPS Subcommittee and TALC Indirect Taxes Subcommittee met. At the TALC BEPS Subcommittee meeting, discussions focused on the participation exemption for certain foreign dividends and the EU Minimum Taxation Directive (Pillar Two). At the TALC Indirect Taxes Subcommittee, discussions highlighted the VAT and excise changes, focusing mainly on the proposed reduction on VAT on certain apartment sales. Then on Thursday, the meeting of the Main TALC/TALC Direct & Capital Taxes Subcommittee was held where the remaining areas of Finance Bill 2025 were teased out. Finally, on Friday, the VAT modernisation subgroup met to discuss the paper published the day after the Budget on the implementation of e-Invoicing.

As readers will appreciate, the full detail of these meetings cannot be shared until the minutes have been agreed by all stakeholders, however below you will find some of the highlights which we can share at this time:

• The participation exemption for certain foreign dividends: The Institute has been consistently calling for further enhancements to the exemption, particularly in terms of extending the geographic scope and relaxing the requirement to look back five years to determine whether a dividend meets certain criteria. While it was hoped that the amendments could have gone further, it is acknowledged that careful consideration must be given to setting appropriate boundaries to ensure the Irish tax base is sufficiently protected from potential abuse.
• The enhanced deduction for eligible construction expenditure: The current draft legislation has been subject to much scrutiny since Finance Bill 2025 was published. It is understood that industry bodies are concerned that in its current iteration it will not have the desired impact on construction activities. Therefore, it is expected to be subject to further revision before Finance Act 2025 is enacted.
• The residential zoned land tax (RZLT): The Institute has been engaging with Revenue throughout the summer months to identify necessary amendments to the RZLT. Unfortunately, while the proposed amendments in Finance Bill 2025 do address some of these concerns, there remains a number of areas where the legislation still requires further consideration.
• The reduced rate of VAT on apartments as a social policy: The draft legislation is likely to be subject to revision in order to clarify what types of apartments are in scope of the reduced rate. Therefore, readers are cautioned to review the final legislation once it is enacted later this year.