Last Monday, the Institute, under the auspices of the Consultative Committee of Accountancy Bodies – Ireland (CCAB-I), attended the Business Tax Stakeholder Forum at the Department of Finance. The Finance Bill was the focus of the meeting, however, the Department of Finance also updated stakeholders on recent developments at the EU, the United Nations, and the Organisation for Economic Co-operation and Development (OECD).
Given the forum focuses on business taxes, the Finance Bill discussions centred on those changes most relevant to businesses, such as the proposed amendments to the participation exemption for certain foreign dividends, the Research and Development (R&D) tax credit, Revised Entrepreneur Relief, and the Special Assignee Relief Programme (SARP). For the most part, stakeholders welcomed the changes but noted that there are still a number of areas of Irish tax legislation that require an earnest pathway toward simplification.
The Department of Finance has indicated its intention to advance efforts to address the rules relating to the deductibility of interest in Ireland. This process will include a feedback statement expected to be published in the coming weeks. Further, following the public consultation on the R&D tax credit earlier this year, the department will be considering ways to enhance the relief, such as whether the definition of expenditure could be expanded. Stakeholders expressed disappointment that the proposed amendments to the taxation of exchange traded funds (ETFs) and similar instruments did not go as far as deemed necessary to truly enhance the attractiveness of these instruments for retail investors, i.e. removing the deemed disposal rules and aligning the rate on gains with capital gain tax rates.
On the international front, the Department of Finance remains highly engaged at the level of the EU, the OECD and the UN. On the EU front, Ireland will be taking over the Presidency of the Council of the EU on 1 July 2026, following on from Denmark and Cyprus. This will involve the Minister for Finance chairing the Ecofin and Budget Council, officials chairing working parties, representation of the Council at Trilogue negotiations, as well as a range of other roles. The Department will be seeking input from stakeholders ahead of assuming the Presidency.
In terms of developments at the OECD and the UN, the main focus at the former is whether a ‘side-by-side’ system is feasible between countries who have implemented Pillar Two and the US minimum tax rules. At the UN, the focus is on an alternative project – the Framework Convention on International Tax Cooperation. The UN project is being driven by developing nations who potentially do not stand to benefit from the Pillar Two system as much as their trade partners in more developed countries. The next year in particular will be a very important year insofar as the future of international tax cooperation is concerned.
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