Budget 2026

Chartered Accountants Ireland notes targeted actions to support business and the domestic economy, such as changes to Revised Entrepreneurs Relief, the extension of the Special Assignee Relief Programme, and an increased rate of R&D tax credit, noting the role these can play in enabling Ireland to remain competitive in attracting quality employment and investment. Cróna Clohisey, Director of Members & Advocacy, said: “Global economic uncertainty presented government with a trade off in Budget 2026, and it is clear today that VAT measures have trumped personal taxes in the need to protect employment.    “For the first time in five years, income tax credits and bands have not been adjusted for inflation—meaning many workers will face an unexpected tax hike in 2026. Wage growth will push more earners into the 40% tax bracket, while rising PRSI contributions further erode disposable income. This squeeze on take-home pay, despite no change in tax rates, will inevitably impact consumer spending.”  Missed opportunity to reduce the burden of compliance for business On Enhanced Reporting Requirements, Cróna Clohisey said: “It is really disappointing that no changes to Enhanced Reporting Requirements were announced today. The onerous real-time reporting of tax-free small benefits and expenses is a compliance burden on businesses and not addressing this today was a missed opportunity.” Balancing the cost of doing business Chartered Accountants Ireland advocates on behalf of almost 40,000 members, with Institute research showing that 77% of SME members reported increased business costs in the past six months, the largest being labour costs. While the VAT reduction for food, catering and hairdressing services will be helpful in managing costs for some businesses, it will not address the cost pressures facing SMEs across other sectors of the economy. Cróna Clohisey said: “While the reduction in VAT for certain hospitality services may offer some relief to businesses in that sector, it does not address mounting cost pressures across the wider economy. For example, businesses have already been impacted by the increase in Employers’ PRSI from 1 October 2025 with further increases expected each year up to 2028 – a direct increase in the cost of labour. A more sustainable approach to easing these cost burdens is needed.” Supports for business At a time when countries globally are sharpening their industrial tools amid greater competition for investment, today’s changes to the R&D tax credit demonstrate the government’s commitment to research and innovation. Gearóid O’Sullivan, Head of Tax, Chartered Accountants Ireland said: “R&D is an extremely valuable tool to boost economic resilience and drive growth and job creation in the economy, and today’s increase in the R&D tax credit rate to 35% is very welcome. We look forward to further detail in the coming weeks on the government’s research & development compass which we hope will lead to meaningful changes to the relief to address divergence with industry practices. “In terms of broader innovation and enterprise supports, we know that barriers to access and administration can disincentivise businesses from claiming, particularly for time and resource-constrained SMEs. Such barriers should be reduced in favour of efficiency wherever possible.” Addressing the infrastructure deficit Chartered Accountants Ireland has engaged extensively in recent years on methods to address significant deficits in the State’s crucial infrastructure, which represent a threat to ongoing economic growth and investment. Commenting on the tax measures for new build apartments, Cróna Clohisey said: “The VAT cut on new apartment sales coupled with the targeted corporate tax deduction for certain construction costs on the building of new apartments should help address supply challenges given it will be implemented in a time limited and targeted way. Viability of certain construction projects has been cast into sharp focus in recent months, with CSO data showing a drop of 24% in apartment completions from 2023 to 2024. Today’s measures will hopefully jumpstart construction on many sites that already have planning permission.”  

  Just this week, Euronext launched its first integrated marketplace for European exchange -traded funds (ETFs), a development that enhances liquidity and transparency across the continent and has potential benefits for Dublin. At the same time, the current ETF “deemed disposal” Irish tax rules continue to act as a barrier for both investors and fund promoters. With Budget 2026 around the corner, there is an opportunity to consider reforms that would better align Ireland with international peers, broaden retail investor participation, and reinforce Ireland’s position as a leading hub for ETF activity. In our response to the Ireland for Finance 2026–2030 consultation, Chartered Accountants Ireland highlighted the importance of strengthening Euronext Dublin and modernising the tax treatment of exchange-traded funds (ETFs) as part of Ireland’s next financial services strategy. Ireland is already a global leader in ETFs, but further action is needed to ensure long-term competitiveness. Revitalising Euronext Dublin Ireland’s domestic exchange is a vital piece of infrastructure. A deeper, more liquid stock exchange not only helps indigenous firms raise equity but also positions Ireland as more than just a fund servicing centre. Reviving Euronext Dublin is key to building credibility as a hub for capital markets activity. A European Opportunity Euronext has recently launched its first integrated marketplace for European ETFs, designed to boost liquidity, transparency and efficiency across multiple exchanges. With Ireland’s established expertise in ETF servicing and regulation, Dublin is well placed to take advantage of this development and attract new flows of capital. Tackling the Tax Barrier The current “deemed disposal” rule; taxing ETF investors every eight years, even if they do not sell, creates a barrier for both domestic investors and international promoters. Reforming this rule would make Ireland more competitive internationally and encourage wider retail participation in capital markets. Budget 2026 as a Turning Point Budget 2026 provides an opportunity to modernise ETF taxation and align Ireland with peer jurisdictions. Coupled with the momentum from Euronext’s new ETF marketplace, such reform could strengthen Ireland’s position as a leading location for ETF activity and deliver long-term benefits for the wider economy. For more information read our full submission to the Department of Finance on Ireland for Finance 2026–2030  here.

Last week, the Minister for Finance, Paschal Donohoe TD, and the Minister for Public Expenditure, Infrastructure, Public Service Reform and Digitalisation, Jack Chambers TD, met with the Oireachtas Committee on Budgetary Oversight to discuss Budget 2026.  In his opening statement, Minister Donohoe outlined the economic context and fiscal background to  Budget 2026 which will be announced next week. The Minister confirmed a total budget package of €9.4 billion, made up of €1.5 billion in tax and €7.9 billion in expenditure measures. The risks associated with the overreliance by the economy on the FDI sector and corporation tax receipts were noted. The Minister outlined measures to address these risks, including continuing to run budgetary surpluses and building up the Future Ireland Fund and the Infrastructure, Climate and Nature Fund to €16 billion by the end of 2025. In his opening statement, Minister Chambers outlined the ongoing work in terms of the Summer Economic Statement, the Medium Term Expenditure Framework and the National Development Plan.