The Tax Strategy Group (TSG) last week published its annual papers in advance of Budget 2025. The TSG is chaired by the Department of Finance and comprises senior officials and advisers from several governmental departments and offices. The TSG is not a decision-making body, rather its purpose is to outline the tax policy considerations for the Government and the options available to it in forming this year’s Budget.
In this year’s papers, the TSG notes that the key challenges for Ireland’s economy are ongoing capacity constraints, the aging population, digitalisation, de-carbonisation and de-globalisation. The TSG also highlights the country’s reliance on multinational companies and the vulnerability that this presents for our corporation tax base.
The full list of papers released by the TSG are as follows:
Income Tax (TSG 24/01) includes a summary of tax yields, information on the distribution and burden of income tax and USC and policy considerations for reform. Other items discussed include tax relief for sporting bodies and philanthropy, the incapacitated child tax credit, income tax property-related measures and pensions.
Pay Related Social Insurance (TSG 24/02) examines issues including social transfers, Irish labour market trends, social protection budgets and costings.
Corporation Tax (TSG 24/03) examines a range of topics such as corporation tax trends, implementation progress of the OECD BEPS Project (including Pillar One and Pillar Two), EU tax developments, an update on Apple State Aid case and a discussion on various business support measures, including the Research and Development Tax Credit.
Enterprise Supports (TSG 24/04) discusses various business tax reliefs, including Reliefs for Investment in Corporate Trades (EII/SCI/SURE) and Innovative Enterprises (Angel Investor), Revised Entrepreneur Relief, Retirement Relief, Share-based Remuneration and accelerated capital allowances. It refers to the report of the TALC Sub-Committee on Simplification and Modernisation of Business Reliefs for SMEs, noting that the Department of Finance will consider some matters of policy that were identified by stakeholders. The Department will also consider administrative proposals that may require legislative amendment.
Agri-Taxation Measures (TSG 24/05) looks at the agri-taxation measures available under each tax head.
Capital and Savings Taxes and Stamp Duty (TSG 24/06) covers capital gains tax, capital acquisitions tax, DIRT, life assurance exit tax, stamp duty, the Tax Appeals Commission and residential zoned land tax and examines rates, yields and exemptions associated with these taxes. It also provides an update on the Department’s ongoing project to improve the reporting of Tax Expenditures.
Value Added Tax (TSG 24/07) reviews VAT rates and structures, provides options for change and looks at VAT developments at EU and domestic level.