The Department of Finance recently published the Research and Development Tax Credit 2025 review which was undertaken in line with the Department’s tax expenditure guidelines  and which examined the effectiveness of the scheme. As part of the review, a public consultation on the Research and Development (R&D) tax credit and on options to support innovation was conducted in 2025. The Institute submitted feedback as part of this process. One of the key messages from the review is that the R&D tax credit is important for both foreign direct investment and for supporting domestic companies and it fosters higher levels of productivity and innovation. Other findings of the review are as follows: The R&D tax credit contributes to higher levels of research and development which is associated with increased labour productivity and economic growth. Business expenditure on R&D has steadily increased over time and significantly increased in recent years. The R&D tax credit has increased in cost to the Exchequer in recent years with the cost of the R&D tax credit rising from €1.2 billion in 2022 to €1.4 billion in 2023, nearly twice that of the €708 million Exchequer cost in 2015. Companies claiming the R&D tax credit are also significant contributors to the Exchequer through corporation tax receipts. In 2023, total corporation tax liabilities for all claimant companies were €10.53 billion. The cost of the R&D tax credit is concentrated among large companies including multinational companies (MNCs), but participation by SMEs is also strong. Ireland ranks among the most attractive OECD countries for R&D tax incentives. Commenting on the publication of the review, Tánaiste and Minister for Finance, Simon Harris said: “I am delighted to announce the publication of the 2025 Review of the R&D tax credit regime. The R&D tax credit is an important feature of the corporation tax system and plays a key role in our competitiveness and in the development of our knowledge economy. Companies engaged in R&D are at the forefront of developments critical to addressing the challenges of digitalisation and climate change. They also deliver valuable spillover benefits to our education sector and local economies, in addition to supporting high-quality employment in Ireland”.

Earlier this week members from industry and practice met in the Titanic Hotel in Belfast to discuss the Institute’s ongoing campaign to lower the rate of corporation tax in Northern Ireland. In June 2025 the Institute launched its refreshed campaign for a lower rate after a survey of members showed ongoing and broad support for this campaign. The campaign kicked off again last year when the Institute published its position paper ‘Enhancing Our Competitiveness: The case for a reduced rate of corporation tax in Northern Ireland’.  The Institute believes that Northern Ireland needs a comprehensive industrial policy that attracts investment, encourages entrepreneurship and brings well paid, secure jobs to the Northern Ireland economy.  Coupled with dual access to both the EU and UK markets, reducing the rate of corporation tax in Northern Ireland would be transformative for the entire economy.  Since the summer, the Institute has met with a broad range of stakeholders, including many of the major political parties in Northern Ireland, to discuss this issue. This work will continue in 2026 with the ultimate aim of developing a plan to implement a lower rate in the longer term. The Institute’s ongoing campaign for a lower rate of corporation tax for NI was also highlighted in 2025 in submissions to HMRC, and HM Treasury. In addition, in November 2025, the Institute wrote specifically to the Exchequer Secretary to the Treasury on this issue highlighting that the ultimate aim of a lower rate is that it would become self-funding in the longer term but that it would necessitate a replacement loan at a low interest rate from HM Treasury to fund the necessary block grant reduction. Attendees at the event on Monday heard about the work to date and discussed the opportunities and challenges that a lower rate would present. Attendees continue to be supportive of pursuing a lower rate and shared ideas on how to take the campaign forward and how the issue of the block grant reduction could be mitigated. The discussion also heard about the importance of this issue to local businesses, sharing what a rate cut would mean for them and the importance of protecting the existing tax base of Northern Ireland. If you work in a local business and would like to participate in the Institute’s campaign by being a voice of support for a lower rate, contact us by email.

Earlier this week members from industry and practice met in the Titanic Hotel in Belfast to discuss the Institute’s ongoing campaign to lower the rate of corporation tax in Northern Ireland. In June 2025 the Institute launched its refreshed campaign for a lower rate after a survey of members showed ongoing and broad support for this campaign. The campaign kicked off again last year when the Institute published its position paper ‘Enhancing Our Competitiveness: The case for a reduced rate of corporation tax in Northern Ireland’. Since then, the Institute has met with a broad range of stakeholders, including many of the major political parties in Northern Ireland, to discuss this issue. This work will continue in 2026 with the ultimate aim of developing a plan to implement a lower rate in the longer term. The Institute’s ongoing campaign for a lower rate of corporation tax for NI was also highlighted in 2025 in submissions to HMRC, and HM Treasury. In addition, in November 2025, the Institute wrote specifically to the Exchequer Secretary to the Treasury on this issue highlighting that the ultimate aim of a lower rate is that it would become self-funding in the longer term but that it would necessitate a replacement loan at a low interest rate from HM Treasury to fund the necessary block grant reduction. Attendees at the event on Monday heard about the work to date and discussed the opportunities and challenges that a lower rate would present. Attendees continue to be supportive of pursuing a lower rate and shared ideas on how to take the campaign forward and how the issue of the block grant reduction could be mitigated. The discussion also heard about the importance of this issue to local businesses, sharing what a rate cut would mean for them and the importance of protecting the existing tax base of Northern Ireland. If you work in a local business and would like to participate in the Institute’s campaign by being a voice of support for a lower rate, contact us by email.

In UK news, after significant lobbying by this Institute and other key stakeholders the UK Government announced an increase in the 100 percent allowance for agricultural property relief and business property relief, while the Spring Statement – the next big UK economic and fiscal event – will take place on Tuesday 3 March 2026. In Irish news, Revenue has published preliminary results for 2025. Elsewhere, following a recommendation from the TALC Simplification working group, the guidance on reliefs for investments in corporate trades has been restructured by Revenue. In International news this week, the OECD has published a report on digital continuous transactional reporting for VAT. UK 1. Last month the UK Government announced an increase in the 100 percent allowance for agricultural property relief and business property relief with effect from 6 April 2026. 2. The Spring Statement will take place on Tuesday 3 March 2026. Ireland 3. Revenue has recently published its headline results for 2025. 4. Following our engagement in the Tax Administration Liaison Committee (TALC), Revenue has recently restructured its guidance on reliefs for investments in corporate trades. International 5. Read the report recently issued by the OECD on digital continuous transactional reporting for VAT. Keep up to date with all the latest Irish, UK, and international tax developments through Chartered Accountants Ireland’s Tax Newsletter. Subscribe to the Tax News by updating your preferences in MyAccount. You can also read this week’s Cross-border developments and trading corner here.  

Revenue has updated various pension manuals providing clarifications and guidance relating to the transfer of pension benefits, deemed distributions from pension funds and the taxation of retirement lump sums. The guidance on the transfer of payments has been updated to clarify the treatment of benefits transfer from an occupational pension scheme to a Personal Retirement Savings Account (PRSA), to another occupational pension scheme or to an approved buy-out bond (BOB). The guidance on funding and investments has been revised to update the reference to the Revenue pensions branch and to provide details on deemed distributions from pension funds. The guidance on the taxation of retirement lump sums has been reorganised to provide relevant information including 

Finance Act 2025 was signed into law on 23 December 2025. We will notify our readers once our TaxSource resource has been updated to reflect the relevant changes.

Revenue has published a new chapter in the pensions manual to provide guidance on the Automatic Enrolment Retirement Saving System. The guidance provides details on contributions to the auto enrolment system by participants, employers and the State, and includes relevant taxation implications and related contact details. The layout of the guidance is as follows: Paragraph 1: Introductory section, Paragraph 2: Contributions by participants and repayments of contributions to a participant, Paragraph 3: Contributions by an employer and repayments of contributions to an employer, Paragraph 4: Contributions made by the State, Paragraph 5: Taxation of payments made from the Automatic Enrolment Retirement Savings System, Paragraph 6: Taxation of payments made following the death of a participant, Paragraph 7: Interaction of the Standard Fund Threshold with auto-enrolment savings, and Paragraph 8: Contact details for the National Automatic Enrolment Retirement Savings Authority and the Department of Social Protection.

The deadline for the completion of the Large Corporates Division (LCD) VAT modernisation and eInvoicing survey is 5pm on 16 January 2026. We encourage members working in VAT-registered businesses under the remit of LCD and those advising LCD VAT-registered businesses to share their insights with Revenue and to urge their clients to complete the survey. While the survey includes a box for the taxpayer’s number, this does not need to be included to complete the survey, and you can leave this box blank and still respond. Further details regarding the survey are included in our earlier newsletter items.

Revenue has advised that ROS services will be unavailable today for an hour from 18.00 to 19.00 due to essential maintenance. This will impact public facing services for Local Property Tax, Revenue Online Service for businesses, vehicle registration and myAccount. Direct Payroll reporting and AIS/AES Customs services will not be impacted. 

The Department of Finance and the Department of Public Expenditure and Reform have published the Fiscal Monitor for December 2025 confirming an Exchequer surplus of €7.1 billion for 2025. This compares to a surplus of €12.8 billion recorded for 2024, with the year-on-year decline of €5.7 million being impacted by receipts arising from the Court of Justice of the European Union (CJEU) ruling in the Apple State Aid case. When these receipts are excluded from total receipts in 2024 and 2025, an underlying surplus of €3.8 billion was recorded which represents an improvement of €2.0 billion on the same period last year. Tax receipts collected for 2025 were €107.4 billion for the full year, which was €0.6 billion lower than in 2024. Excluding the once off receipts from the Court of Justice of the European Union (CJEU) judgement in the Apple State Aid case, total receipts amounted to €105.7 billion, an increase of €8.6 billion on the corresponding period in 2024. Income tax receipts for the month of December were €2.8 billion, unchanged compared to the same month in 2024. On a year-to-date basis, receipts for the full year of €36.6 billion were up by €1.5 billion (4.3 per cent), when compared to the full year 2024. Corporation tax receipts of €3.6 billion were collected in December, which is down by €0.5 billion on the same month in 2024. On a cumulative basis, receipts of €34.7 billion were down by €4.4 billion on 2024. When the once-off CJEU receipts are excluded, cumulative corporation tax receipts for the full year amounted to €32.9 billion, higher than the total for 2024 by €4.8 billion. December is a non-VAT due month and receipts of €0.5 billion were collected in the month with cumulative receipts recorded of €22.9 billion for 2025 which were ahead by €1.1 billion on the total receipts for 2024. Commenting on the figures, Tánaiste and Minister for Finance, Simon Harris said: “The Exchequer figures for 2025 are a reflection of the fundamental strength of our economy: income tax and VAT receipts, the clearest indicators of our economic performance, are continuing to perform well, while most other revenue streams are in line with expectations. As we look towards 2026, this Government is committed to using the resources of the State to improve people’s lives in a sustainable manner. Last month, we published Ireland’s Medium-Term Fiscal and Structural Plan, which represents a fundamental shift in the way we do budgetary policy in Ireland. The Plan fixes the level of spending without restricting us from improving public services, investing in infrastructure and protecting the public finances.”

Revenue has updated several guidance documents to reflect changes introduced by Finance Act 2025. We have listed below the documents which have been updated, and details of the relevant changes are included in the Institute’s Finance Bill at a glance document. In some cases, the examples in the guidance have also been updated to reflect the changes. Employer provided vehicles, Deduction for retrofitting expenditure, Rent a room relief, Charitable tax exemption, the updated guidance also provides further details on reliefs and exemptions for charities, and Universal Social charge, this updated guidance also confirms that employer contributions to the Auto Enrolment Retirement Savings System in respect of an employee are not considered relevant emoluments for the purposes of USC and that a donation under section 847AA TCA1997 in respect of donations to National Governing Bodies is not relieved from USC.

Over the break, Revenue has updated its Tax and Duty Manuals (TDMs) relating to Pillar Two which is the core guidance for companies to calculate taxes due under Pillar Two. The relevant manuals are TDM 01A-01-01A which provides guidance on the Pillar Two registration process and TDM 04A-01-02 which is the core guidance for companies calculation taxes under Pillar Two. In terms of registering for taxes under Pillar Two, companies should note that the deadline for registering has been extended to 28 February 2026 (previously 31 December 2025). Revenue guidance on Pillar Two Revenue has updated several areas of its guidance on Pillar Two. The changes include: Section 6.10, regarding the calculation of the Undertaxed Profit Rule (UTPR), has been updated for scenarios where there has been a merger. Section 8.9 has been updated to clarify the treatment of post-filing adjustments and tax rate changes. Section 9.8, regarding the Transitional Country-by-Country Reporting (CbCR) Safe Harbour, has been updated to clarify how a decrease in covered taxes affects the calculation of simplified covered taxes. Section 9.8.1 clarifies how the Transitional CbCR Safe Harbour applies where there is a change in tax residency of an in-scope entity. Section 10.2 discusses the impact of mergers and constituent entities joining and leaving in-scope groups. Section 11.5 clarifies the election to treat an investment entity as a tax transparent entity and the determination of the minimum tax rate applicable. Revenue has advised that the TDM will be updated further in due course to reflect the amendments made in Finance Act 2025. Revenue guidance on Pillar Two registration Revenue has also updated several sections of its guidance on registering for Pillar Two taxes. These include: A new paragraph explaining a new administrative practice for inactive or dormant entities that meet certain requirements. A new paragraph explaining an administrative practice where there is a dissolved entity. A paragraph explaining the registration process for entities without an active tax registration. Clarification on the ROS permissions required by agents using a ROS sub-user certificate. New guidance on approving agent link requests.