Several measures were included in Budget 2026 to accelerate Ireland’s energy transition and underpin Ireland’s journey to a net-zero future. Residential buildings were arguably the greatest beneficiaries of the almost €1.1 billion allocated to the Department of Climate, Energy and the Environment. Funding of €558 million – an increase of €89 million on last year’s corresponding allocation – was allocated to Sustainable Energy Authority of Ireland (SEAI) residential and community energy upgrades, including the Solar PV (photovoltaic) Scheme. Public sector building retrofits will also benefit from continued investment, with €21 million allocated for public sector retrofitting for 2026 under the first phase of ICNF (Infrastructure, Climate and Nature Fund). This purpose of this fund is to support State expenditure where there is a significant deterioration in the economic or fiscal position of the State, and in the years 2026 to 2030, on designated environmental projects. The Finance Act 2020 legislated for annual increases in carbon tax to reach €100 per tonne of CO2 emitted by 2030. This year’s increase – announced yesterday in Budget 2026 – brings the tax to €71 per tonne of CO2 emitted. The tax is applied to auto fuels with effect from the 8 October 2025, and to all other fuels from the 1 May 2026. The additional revenue arising from the carbon tax increase is estimated at €121 million in 2026 and the full year additional yield is estimated at €157 million. Commenting, Susan Rossney, Institute Sustainability Advocacy Manager, said “Chartered Accountants Ireland has consistently advocated for taxpayers to be shown a direct link between the carbon tax collected and how they benefit. Therefore, the decision to ring-fence the revenue expected from carbon tax in 2026 to spend on social welfare measures and other measures to prevent fuel poverty, and to ensure a just transition, is welcome. However, more detail will be needed on the distribution of funds to Government’s planned projects, particularly the €209 million which has been allocated to accelerate climate action and prepare Ireland for the impacts of a changing climate, to understand whether the risks from climate change and biodiversity loss have been properly accounted for. This is especially important given the warning from the Irish Fiscal Advisory Council that failing to meet EU climate targets could cost Ireland between €8 and €26 billion by 2030.” The measures funded, relevant Departments, and the allocation for each is outlined in Budget 2026 – The Use of Carbon Tax Funds. Budget 2026 also includes investment in offshore renewable energy site data surveying to assist in the de-risking of future projects. €30 million has been allocated for the Landfill Remediation Programme, described by Department of the Climate, Energy and the Environment as “support[ing] Ireland in transitioning to a Circular Economy, whilst protecting our natural resources, environment and health on the national journey to net zero by 2050”. The extension to 2030 of the Accelerated Capital Allowances scheme for energy-efficient equipment also means that companies investing in, among other things, electric cars for their fleets will be able to write 100 percent of the asset value of those vehicles off against tax in the first year of ownership. Other EV measures include the extension to 2026 of the €5,000 VRT relief for EVs, and the creation of a new vehicle category for zero-emission cars only, where the lowest BIK rates will apply.  Connected to this is the extension of the 9 per cent rate of VAT on gas and electricity bills until the 31 December 2030 which will be welcomed by EV drivers keen to avoid an increase in EV charging prices. The extension to 2028 of the Income Tax disregard of €400 for income received by households who sell electricity from micro-generation back to the grid is to be welcomed, includes electricity sold back to the grid from EVs enabled with Vehicle-to-Grid or V2G technology. To help reinforce the electricity grid, ESB and Eirgrid will receive €3.5 billion.        

  In this week’s Sustainability/ESG Bulletin, read about green measures in Budget 2026. Also covered is the Institute’s response to the public consultation on the Northern Ireland draft Climate Action Plan 2023–2027, green public procurement in an upcoming Institute conference, new accessibility guidelines for microenterprises, analysis pointing to a lack of credit transition plans, the demise of the Net-Zero Banking Alliance, the acceleration of the global energy transition, as well as the usual articles, resources and upcoming events.   IRELAND Budget 2026 Several measures were included in Budget 2026 to accelerate Ireland’s energy transition and underpin Ireland’s journey to a net-zero future. Read analysis from Chartered Accountants Ireland here. Institute responds to public consultation on the Northern Ireland draft Climate Action Plan 2023–2027 Chartered Accountants Ireland has responded to the Department of Agriculture, Environment and Rural Affairs (DAERA) consultation on the draft Climate Action Plan 2023–2027. In our response, we called for called for targeted supports for SMEs, along with incentives, clear communication and minimum “red tape” to help SMEs fully engage with Northern Ireland’s transition to a net zero economy. Read our response here. Institute conference to address green public procurement Green public procurement will form part of the Institute’s Public Sector Conference again this year. The conference, which will take place on 15 October, features guest speaker, Brian Quirke from the Department of Climate, Communications and the Climate, Energy and the Environment (DCEE). Brian will present on the Green Public Procurement Strategy and Action Plan, including an update on developments since the strategy was launched in 2024. IRELAND Ireland meets its 2025 EV target   The Department of Transport has announced that Ireland has already met its Climate Action Plan target of 195,000 electric vehicles on the road by the end of 2025.  Described as “a key milestone in the nation's transition to cleaner transport” the development highlights the change in recent years as more households, businesses and communities across the country benefit from the lower running costs, quieter streets and reduced emissions which EVs bring. While acknowledging the achievement, the next five years will demand an even greater collective effort as Ireland has committed to ensuring that 30 percent of the national vehicle fleet is electric by 2030. Infrastructure investment key to meeting Ireland’s environmental and climate targets Scaled-up investment in water, energy, transport and waste management infrastructure to address the significant environmental challenges is essential to meet the demands of Ireland’s growing economy and population. This was among the findings of Europe’s environment 2025, an analysis on the current state and outlook for the continent’s environment, climate and sustainability. The country profile for Ireland suggests that while progress has been made in reducing greenhouse gas emissions and strengthening governance, urgent improvements are needed for Ireland to meet 2025 recycling targets. Action is also needed to address nature decline and meet 2030 and 2050 climate targets. The report stresses that climate change and environmental degradation pose a direct threat to Europe’s competitiveness, which depends on natural resources. New accessibility guidelines for microenterprises published by CCPC The Competition and Consumer Protection Commission (CCPC) has published guidelines for microenterprises on the European Accessibility Act (EAA). The Act, which became law in Ireland on 28 June 2025, mandates that digital products and services be accessible to all users, including those with disabilities. The Competition and Consumer Protection Commission (CCPC) is the statutory body responsible for promoting compliance with, and enforcing, competition and consumer protection law in Ireland. Northern Ireland/UK Funding opportunity for women-led businesses to scale and export Invest Northern Ireland has opened applications for their Ambition to Grow | Supporting Women programme. In partnership with Women in Business NI, the programme particularly encourages applications from Northern Ireland’s most innovative and ambitious micro, small, and medium-sized enterprises to compete for up to £30,000 in funding. It aims to help businesses grow by creating jobs, innovating processes, and selling outside Northern Ireland. More details are here. Analysis points to lack of credible plans to align capital with climate goals Analysis published by the TPI Global Climate Transition Centre, part of the Global School of Sustainability at the London School of Economics and Political Science has shown that 98 percent of companies have not disclosed plans to shift capital away from carbon-intensive assets or to align spending with their long-term decarbonisation goals, and that investors need rigorous and independent data on corporate climate action more than ever in the face of significant economic and financial risks from climate change. The State of the Corporate Transition 2025 report– which assessed 2,000 of the world’s highest-emitting public companies on their climate action – described climate change as “the world’s biggest market failure”, but found that strong headwinds are facing the low-carbon transition. The report advises that to mitigate physical climate risk, the financial sector, the ‘real’ economy and governments must take coordinated action to reduce emissions to net zero. EUROPE MEPs call for ambitious EU climate pledge ahead of COP30 The Committee on the Environment, Climate and Food Safety has adopted its policy demands for the UN Climate Change Conference COP30. The resolution states that the EU should remain a leader in international climate negotiations and calls on all countries to contribute their fair share in providing adequate climate finance. MEPs further stressed the need for EU climate policy “to keep a high ambition in line with the agreed targets and to prioritise in its actions cost-effectiveness, the competitiveness of European economy, social inclusion and a high level of environmental protection”, and urged the Council to adopt as soon as possible the EU’s climate pledge for 2035. WORLD Net-Zero Banking Alliance (NZBA) officially disbands The Net-Zero Banking Alliance (NZBA) has officially disbanded following the departure of several key members, although its guidance and supporting documentation will  reportedly “remain publicly available” for individual banks worldwide to use. The Alliance, which was established in April 2021 by 43 global financial institutions under the United Nations Environment Programme Finance Initiative (UNEP FI), aimed to align banks’ lending and investment portfolios with net-zero greenhouse gas emissions by 2050 in line with the Paris Agreement. The decision to disband it was made through a member vote. Global energy transition accelerates Renewable energy—particularly solar and wind—is poised to overtake coal as the leading source of electricity worldwide. The shift is being propelled by a rapid increase in clean energy deployment, spurred by the ongoing energy crisis. According to Renewables 2025, the International Energy Agency’s recently published medium-term forecast, renewable capacity is now projected to grow more quickly than previously anticipated over the next five years,  marking a significant milestone in global decarbonization efforts. However, the report warns that key challenges remain, including maintaining grid reliability and addressing uneven development of renewable infrastructure across regions. Separately, global energy thinktank Ember reported that for the first half of 2025 renewable energy produced more electricity than coal.  Resources Technical Roundup (From our Professional Accounting team) EFRAG has released two complementary reports to support the application of the VSME standard, a report and infographic which provides practical supports to SMEs who wish to report their greenhouse gas emissions under the VSME. This includes a focus on some of the digital tools used by entities in preparing their sustainability reports. The International Sustainability Standards Board (ISSB) has published its September 2025 update and podcast. Articles Why offshore wind energy matters for Ireland’s future (IDA Ireland) ESG might be more resilient than critics expect (Financial Times) Consolidating non-financial data: why standards matter (ICAEW) How should workplaces reframe diversity and inclusion practices? (Financial Times - Subscriber) The true cost of motherhood? Start with £65,000 in lost earnings The Times (UK – Subscriber) Climate action could save 725,000 lives a year, research finds (Edie) The UK’s sustainability disclosure reset: what investors really need (Sustainable Views – FT -Subscriber) Why the UK should double down on double materiality (Sustainable Views – FT - Subscriber) China Is Beating the US in the Battle for Energy Export Dominance (Bloomberg) Tragedy of the horizons a decade on: climate change threatens financial stability (Sustainable Views – FT -Subscriber) Events Business in the Community Northern Ireland (BITCNI), Climate Risk Assessment and Business Continuity Planning Workshop This 90-minute interactive online workshop, delivered in partnership with Climate NI, is designed to equip businesses with the tools and strategies needed to identify, assess, and manage climate-related risks. Participants will explore practical approaches to climate risk assessment and business continuity planning through engaging activities and case studies. The session will cover how to identify climate risks, assess their impact, and develop effective risk management strategies to ensure operational resilience during and after climate disruptions. Virtual, 14 October 2025, 11:00–12:30 Chartered Accountants Ireland, Public Sector Conference  The public sector conference will focus on key issues impacting finance and non-finance professionals working in public service and related organisations. This includes civil and public servants, as well as those working in public bodies and not-for-profit organisations. Virtual, 15 October | 9:30am–1:30pm | 4 hours CPD Business in the Community Northern Ireland (BITCNI),  Age-Inclusive Workplaces: Building the Case  This online workshop marks the first in a new series exploring the importance of age inclusion in the workplace. With shifting demographics in Northern Ireland, the session will highlight why age should be a priority on workplace inclusion agendas. Attendees will gain insights into the business case for age diversity and learn how inclusive practices can support employees at all life stages, particularly those aged 50 and over. Virtual, 15 October 2025, 10:00 – 11:30 am Business in the Community Northern Ireland (BITCNI), An Introduction to Biodiversity Workshop This online workshop provides foundational knowledge on biodiversity and its relevance to business, society, and the environment. Designed for professionals across all sectors, the session explores the importance of nature-positive action, threats to biodiversity, and practical steps businesses can take to support conservation. Participants will receive a handout and access to a short assessment, with a certificate awarded upon completion. Virtual, 16 October 2025, 14:00–16:00 BST An Taisce, Climate Action Week, 13 – 19 October 2025 Climate Action Week is Ireland’s largest pop-up climate festival and has been coordinated by An Taisce since 2017. On behalf of the Department of Climate, Energy and Environment the 9th festival will bring nationwide spaces that champion local planet protectors and welcome solution seekers to events that tackle the climate crisis in exciting and empowering ways. International Society of Sustainability Professionals Webinar: AI in Action: Practical Tools for Corporate Sustainability Impact Artificial Intelligence is rapidly transforming how organizations collect data, measure impact, and drive sustainability performance—but it can be difficult to separate the hype from the real-world applications. In this session, we’ll explore how corporate sustainability professionals can leverage AI to work smarter, not harder. Virtual, Wednesday, October 22, 2025, 11:00 AM - 12:00 PM (EDT) NESC, NESC Energy Conference 2025: Energising the Transition This conference follows the publication of NESC’s reports Ireland’s Future Power System and Economic Resilience, International Trade Dependencies and the Energy Transition, and Connecting People to the Energy Transition, as well as the forthcoming Energy Transition: A Systems Perspective. The in-person event builds on this extensive body of work and incorporates inputs from national and international experts to provide stimulating discussions of how Ireland can make the necessary transition for the good of all people and sectors. In person, Radisson Blu Royal Hotel, Dublin 2, 22 October, 8.30-15.45 A4S Insights,  Integrating sustainability into decision making – stories of impact Discover what it takes to drive change in finance at this online event featuring winners of the Finance for the Future Awards. Hear how bold sustainability actions are transforming organisations, and learn from the challenges and successes of real-world changemakers. A panel of judges will share insights into what makes an effective sustainability leader, offering practical lessons in resilience, collaboration, and impact that attendees can apply in their own organisations. Virtual, 29 October 2025, 16:00 GMT Sustainability Europe, Sustainability Europe 2025 This in-person event in London brings together finance professionals and sustainability experts to explore how organisations can navigate regulatory uncertainty, climate risk, and supply chain complexity while driving sustainable growth. A highlight of the programme is the A4S-led panel chaired by Ciara Burke, Director of CFO Programme Europe, which will focus on strengthening collaboration between finance and sustainability teams to improve reporting outcomes. In person, London, UK, 21–22 October 2025, 08:40–17:50;  A4S Session: Detangle the regulation web and master interoperability Date and time: 21 October 2025, 15:15–15:50 BST Ibec Networks Autumn Seminar Series, Session 4: The culture of sustainability innovation The final webinar in a four-part series Autumn Seminar Series ‘The culture equation’ looks at what supports are available to assist on a journey to becoming a more sustainable business. In the supporting case study from O'Brien's Fine Foods the webinar will discuss what drives a sustainability focused culture in an organisation. Virtual, Thursday 13 November, 11.00-11.50am Sustainability Centre You can find information, guidance and supports to understand sustainability and meet the challenges it presents in our online Sustainability Centre.    

IAASA has published an updated edition of its Compendium of Illustrative Reports. The update reflects the auditing standards and legislation in effect at 30 June 2025. The Compendium includes example audit reports for: Financial statements of a private company Financial statements of a private group Financial statements of a micro company Revised financial statements Abridged financial statements Financial statements of a qualifying partnership Financial statements of an industrial or provident society Financial statements of a friendly society Key changes in this edition include: An updated and simplified link to the description of the auditor’s responsibilities on IAASA’s website. Updated language in the auditor’s opinion section to refer to ‘material accounting policy information’, where relevant. This reflects changes to certain accounting standards and updates in the International Auditing and Assurance Standards Boards’ handbook. Inclusion of sample wording to reflect the requirements of S.I. No. 322/2023 – European Union (Disclosure of Income Tax Information by Certain Undertakings and Branches) Regulations 2023. For reports prepared under the Companies Act 2014, the auditor must include a statement whether the entity was required to publish a report on income tax information for the previous financial year. Updated legal references, amended terminology, and new footnotes within the example reports for industrial and provident societies and friendly societies, providing additional guidance for auditors on the content and format of their report. Auditors are encouraged to review the updated examples to ensure that their audit reports align with current requirements. The updated Compendium is available to download from the Auditing Standards Page of IAASA’s website

October marks World Mental Health Month, and in Ireland, this year’s theme is Community. In a world that often feels increasingly fragmented and divisive, a sense of community can seem like a thing of the past, but it offers us a grounding force. It’s where we find connection, support, and a sense of belonging. Whether in our personal lives or professional environments, community is the thread that weaves wellbeing into the fabric of everyday life. It’s not just about being surrounded by  people—it’s about being seen, heard, and valued. Why Community Matters for Mental Health While individual resilience and self-care are important, supportive relationships and kinship help us grow these qualities. Research consistently shows that strong social connections are linked to lower rates of anxiety and depression, higher self-esteem, and even longer life expectancy. Healthy relationships provide us with:  Emotional support during times of stress or uncertainty. Shared purpose, which fosters motivation and meaning. Opportunities for growth, through collaboration and learning. A buffer against isolation, which is one of the most significant risk factors for poor mental health. Culturally and historically, Ireland is known for its storytelling and tight-knit community, but in modern Ireland where digital connection and hybrid work models are part of everyday life, our connect to people can feel eroded. Reclaiming and nurturing community is not just a cultural imperative; it’s a mental health one. Our personal community  In our personal lives, community can take many forms: family, friends, neighbours, sports clubs, volunteer groups, or even online spaces. What matters is not the size or structure of the group, but the quality of the relationships within it.  When we engage with communities that reflect our values and interests, we experience a sense of belonging that is deeply protective for our mental health. These spaces become sanctuaries where we can share our joys and burdens, celebrate milestones, and navigate challenges together. Importantly, community also teaches us empathy. By being part of something bigger than ourselves, we learn to listen, to care, and to show up for others.  Our professional community In the workplace, community is often referred to as culture. But it’s more than just business values or team-building days—it’s the everyday lived experience of connection, inclusion, and psychological safety. We spend a significant portion of our lives at work and when that environment fosters community, it can be a powerful source of wellbeing. When it doesn’t, it can contribute to burnout, disengagement, and mental distress. Building community at work means: Creating spaces for genuine connection, not just transactional interactions. Encouraging vulnerability, where people can speak openly about challenges without fear of judgment. Recognising contributions, so individuals feel valued and seen. Supporting mental health proactively, through policies, resources, and leadership that prioritise wellbeing. Leaders play a crucial role here. By modelling empathy, encouraging collaboration, and investing in people, they set the tone for a culture of care. But community-building is everyone’s responsibility. Whether you’re a new hire or a senior executive, you have the power to foster connection, through a kind word, a listening ear, or a shared moment of relatability or humour. Connecting the personal and professional The most resilient communities are those that recognise the whole person. We don’t leave our professional selves at the door when we come home, nor do we stop being people when we are at work. Mental health is holistic, and so too must be our approach to community. Hybrid working models offer both challenges and opportunities in this regard. While remote work can reduce casual interactions, it also invites us to be more intentional about connection. Virtual coffee chats, wellbeing check-ins, and inclusive communication practices can help bridge the gap. Similarly, organisations that support employees’ personal lives, through flexible schedules, family-friendly policies, and mental health resources are investing in community in its fullest sense. Cultivating community It is all well and good creating and acknowledging our need for community but putting it into practice is where we can flourish as human beings. Here are a few ways to cultivate community in your life: Reach out: Send a message to someone you haven’t spoken to in a while. Connection starts with a simple hello. Participate: Join a local group, attend a community event, or volunteer your time. Engagement fosters belonging. Listen deeply: Whether at home or work, make space for others to share. Listening is one of the most powerful acts of care. Celebrate together: Mark achievements, birthdays, and milestones. Shared joy strengthens bonds. Advocate for inclusion: Ensure that your communities—especially professional ones—are welcoming to all, regardless of background or identity. Mental health is not a solo journey. It’s shaped by the people around us, the environments we inhabit, and the connections we nurture that create communities that uplift, support, and empower. Whether in our homes, our workplaces, or our wider society, we all have a role to play in creating spaces where our wellbeing and mental health is being nourish and protected.    Thrive is the Institute's wellbeing hub that provides access to a range of wellbeing supports. For more advice or information, contact the team by email at: thrive@charteredaccountants.ie  or by phone: (+353) 86 0243294. 

The Minister announced a new exemption from the 1 percent stamp duty on the acquisition of shares in Irish registered companies with a market capitalisation of below €1 billion. In addition, several stamp duty reliefs have been extended.  Stamp duty exemption for acquisition of shares   A new exemption from the 1 percent stamp duty on acquisitions of shares in Irish registered companies is being introduced for companies a market capitalisation of below €1 billion. The companies must be admitted for trading on a regulated market, a multi-lateral trading facility, or an equivalent third country market. The exemption is set to expire on 31 December 2030. It is expected to cost €24 million per annum.  As a consequence, the existing stamp duty exemption for shares in Irish registered companies traded on the Euronext Growth Market (formerly the Enterprise Securities Market) will be removed.  Farm Consolidation Relief   Farm Consolidation Relief is being extended to 31 December 2029. The relief provides that a 1 percent rate of stamp duty is charged on the net difference between the value of land sold and land acquired as part of a Teagasc certified farm consolidation. In addition, the scope of the relief is being broadened to include non-commercial woodland/forestry. These measures will be subject to separate commencement orders due to the need to notify the EU Commission appropriately. It is estimated to cost €1.5 million per annum.  Young Trained Farmer Relief   The Young Trained Farmer relief is being extended to 31 December 2029. The relief provides a full exemption from stamp duty on the transfer of farmland, subject to certain conditions being met. The extension will be subject to a commencement order due to the need to notify the EU Commission. The extension of the relief is expected to cost €19.8 million per annum.  Residential Development Stamp Duty Refund Scheme   The Residential Development Stamp Duty Refund Scheme is being extended to 31 December 2030. The scheme provides for a partial repayment of the Stamp Duty paid on the acquisition of land where the land is subsequently developed for residential purposes subject to a number of conditions.   To improve its effectiveness the time limits that apply for acquisition to commencement and commencement to completion are being extended from 30-months to 36-months where an application for a stamp duty refund is made in respect of a large-scale residential development.  In addition, to improve efficiencies in delivery of new housing, a full Stamp Duty refund may be claimed in respect of a multi-phase development at the commencement of the first phase of that development. The extension of the relief is expected to cost €19.8 million per annum. 

There were little in the way of income tax measures announced today, however, the Minister for Finance announced a change in the USC bands to ensure that the increased minimum wage of €14.15 remains outside the higher rates of the USC. It is also important to note that all workers will be impacted by the increase of 0.1 percent employee PRSI from 1 October 2025 and another 0.15 percent is expected on 1 October 2026.   Budget 2026 has also extended the rent tax credit and mortgage interest relief that were due to expire in 2025.  The Minister also announced that there is to be a reduction in the rates of taxation that apply to certain investments from 41 percent to 38 percent which includes Exchange Traded Funds (ETFs).   USC  To ensure that the salary of a full-time worker on the minimum wage will remain outside the 3 percent rate of USC when the minimum wage increases from €13.50 to €14.15 from 1 January 2026, the ceiling of the 2 percent USC rate band will increase by €1,318 from €27,382 to €28,700.    As a result, the USC rates and bands from 1 January 2026 will be:  €0 – €12,012 - 0.5% (no change);  €12,013 – €28,700 - 2%;    €28,700 – €70,044 – 3%    €70,045+ - 8% (no change); and  Self-employed income over €100,000 - 3% surcharge (no change).  Incomes of less than €13,000 remain exempt from USC.  The estimated cost of the changes in USC is €72 million in 2026 and €76 million per annum thereafter.   Medical card holders with income not exceeding €60,000 will continue to qualify for the reduced USC rate to 31 December 2027.  Rent tax credit  The rent tax credit, which was due to expire on 31 December 2025, has been extended for a further three years to 31 December 2028. The value of the tax credit for 2026 is a maximum of €1,000 per single individual and €2,000 per jointly assessed couple. The cost of retaining this credit to the Exchequer is estimated to be €350 million per annum.  Mortgage interest relief  Mortgage interest relief has been extended on a tapered basis to 31 December 2026. The current level of relief will be maintained for the increase in interest paid in the tax year 2025 over 2022, with a maximum tax credit of €1,250 per property available, this relief can be claimed by taxpayers from 2026. A reduced level of relief will be available for the increase in interest paid in the tax year 2026 over 2022, with a maximum tax credit of €625 per property applicable, this relief can be claimed by taxpayers from 2027.  The cost of extending the relief to 31 December 2026 and maintain the current level of relief for 2025 and reduce the level of relief applicable for 2026 is estimated to be €38 million.  Vehicle benefits in kind  The temporary universal relief of €10,000 applied to the Original Market Value of a vehicle (including vans) for vehicles in Category A-D and the amendment to the lower limit of the highest mileage band is being extended to 31 December 2026. This will taper to €5,000 in 2027, €2,500 in 2028 before it is abolished from 1 January 2029.  The tables used to calculate BIK liability on employer-provided cars are being amended to incorporate a new category for vehicles with zero emissions. The new A1 category introduces reduced BIK rates for electric vehicles, with rates of 6 percent to 15 percent, depending on business mileage.  Micro-generation of electricity   The income tax relief that exempts income up to €400 per annum from the micro-generation of electricity is extended to 31 December 2028. The cost of extending the relief is estimated to cost €10 million per annum.  Taxation of Investments  The rates of taxation that apply to investments in Irish domiciled funds and life assurance policies, other than those applying to companies, personal portfolio investment undertakings and personal portfolio life assurance policies will be reduced, as will the rates that apply to equivalent offshore funds and certain foreign life assurance policies. The tax rate applicable to relevant investments is being reduced from 41 percent to 38 percent. The overall cost of the reduction is estimated to be €19 million.  The rate change will apply to Exchange Traded Funds (ETFs) including Irish domiciled ETFs.  Auto Enrolment   The Finance Bill 2025 will provide for additional amendments to the tax treatment for the Auto Enrolment (AE) Retirement Savings Scheme to  address the tax treatment of AE retirement savings on the death of the participant;  exempt AE provider schemes from investment undertaking tax; and   provide an exemption from USC for employer contributions to AE.  Manufacture of Uilleann Pipes and Irish Harps   The Income Tax disregard on up to €20,000 of a person's profits from the manufacture, maintenance and repair of sets of uilleann pipes, early Irish harps and Irish lever harps, is being extended to 31 December 2028. The relief is expected to cost €500,000 per annum.   

The main VAT changes announced relate to the introduction of 9 percent VAT rate for certain areas of the hospitality and retail sector and on the construction of new apartments. VAT on food and catering businesses and hairdressing services From 1 July 2026, the VAT rate applied to businesses in food and catering and hairdressing services is being reduced from 13.5 percent to 9 percent. It is estimated that this measure will cost €232 million in 2026 and €681 million in a full year. VAT on gas and electricity The reduced VAT rate of 9 percent on gas and electricity bills which was due to expire on 1 November 2025 will be extended until 31 December 2030. VAT on new apartments The VAT rate applied to the construction of new apartments is to be reduced from 13.5 percent to 9 percent. This reduced rate will apply from 8 October 2025 and will last until 31 December 2030. In our Pre-Budget submission, we have called for a targeted, time limited measure to address market failures in the delivery of apartments. It is hoped that the VAT reduction will address this market need effectively and efficiently. VAT Modernisation and electronic invoicing The Minister announced the commencement of a phased implementation of domestic electronic invoicing for business-to-business (B2B) transactions. This implementation supports the EU approved VAT in the Digital Age (ViDA) initiative which aims to modernise the EU’s VAT system.  Further details on this initiative will be outlined in a paper to be published by Revenue tomorrow.

We set out below the remaining measures on excise measure, in addition to changes to the Vehicles Registration Tax and Carbon Tax. Carbon tax rate increase for propellant and other fuels In line with the trajectory set out in the Finance Act 2020, the carbon tax rate per tonne of CO₂ emitted for propellant fuels will increase from €63.50 to €71, effective 8 October 2025. This revised rate will be extended to all other fuels from 1 May 2026, continuing the Government’s commitment to climate action and emissions reduction through fiscal measures. The increase forms part of Ireland’s broader environmental taxation strategy aimed at incentivising lower-carbon energy use across sectors. Extension of Vehicle Registration Tax relief for electric vehicles The Vehicle Registration Tax (VRT) relief for electric vehicles, originally scheduled to expire on 31 December 2025, has been extended by one year and will now remain in place until 31 December 2026. This extension encourages continued uptake of electric vehicles in line with Ireland’s climate and transport decarbonisation goals. Excise Duty increase on Tobacco Products Budget 2026 provides for an increase in excise duty on tobacco products. The duty on a pack of 20 cigarettes will rise by €0.50 (inclusive of VAT). Pro rata increases will also apply across other tobacco products, in line with the Government’s public health objectives and ongoing commitment to reducing tobacco consumption.

This year, as in previous years, a number of key reliefs for the agricultural sector have been extended. We outline these below in further detail. Accelerated Capital Allowances scheme for slurry storage The Accelerated Capital Allowances Scheme for the construction of slurry storage facilities by farmers has been extended for a further four years, now applying until 31 December 2029. Under this measure, qualifying capital expenditure on slurry storage buildings and associated equipment may be written off at a rate of 50 percent per annum over two years, compared to the standard write-off periods of seven years for farm buildings and eight years for plant and machinery. This accelerated relief continues to support investment in environmentally sustainable agricultural infrastructure by improving cash flow and reducing the effective tax burden on capital investment. Farm Restructuring Relief extended and expanded Finance Bill 2025 will provide for the extension of Farm Restructuring Relief to 31 December 2029, continuing support for farmers undertaking land consolidation and restructuring. In addition to the extension, the scope of the relief is being broadened to include: Commercial forestry land, and Non-commercial woodland/forestry, reflecting a more inclusive approach to land use within the agricultural sector. These changes will be subject to separate commencement orders, pending the necessary notification and approval from the EU Commission under State Aid rules. Further operational details will be confirmed in due course. Farm Consolidation Relief extended and scope expanded You can read a full update on the announcements under our Stamp Duty section here. Young Trained Farmer Stamp Duty Relief extended You can read a full update on the announcements under our Stamp Duty section here. Farmer’s Flat Rate VAT compensation revised for 2026 The Farmer’s Flat Rate Payment, which compensates unregistered farmers for VAT incurred on purchases, has been revised for 2026. The new rate will be 4.5 percent, down from 5.1 percent in 2025. This adjustment reflects the average VAT costs incurred by farmers, calculated using macroeconomic data compiled by the Central Statistics Office (CSO) and Revenue over the preceding three years. The Flat Rate scheme continues to provide simplified VAT relief for farmers who choose not to register for VAT, helping to offset input costs without the administrative burden of full VAT compliance.

Budget 2026 includes enhancements to the Research and Development (R&D) tax credit and to various other reliefs including the Key Employee Engagement Programme (KEEP), the Special Assignee Relief Programme (SARP) and the Foreign Earnings Deduction (FED).   Improvements to the dividend participation exemption were also announced including an extension of the geographical scope of the exemption. The Minister also announced that a public consultation on withholding tax will be launched shortly.  R&D tax credit  The Minister announced several important updates for the R&D tax credit in Ireland following the feedback received through the public consultation earlier this year (you can read our response here) and acknowledging the importance of the relief in driving competitiveness in Ireland. The three main enhancements are as follows: The rate of the tax credit has been increased from 30 percent to 35 percent,   An increase in the first-year payment threshold from €75,000 to €87,500 aimed at supporting smaller R&D projects, and An administrative simplification measure was also announced which will allow 100 percent of an R&D employee’s emoluments as qualifying costs where at least 95 percent of time is spent on qualifying R&D activities. The Minister also announced the forthcoming publication of an R&D Compass, which will outline the strategic direction for future developments in research, development, and innovation supports. The R&D compass will also consider changes to the R&D tax credit with respect to the definitions of outsourcing and qualifying expenditure. Key Employee Engagement Programme The Key Employee Engagement Programme (KEEP) has been extended to 31 December 2028. This extension is subject to approval by the European Commission. Special Assignee Relief Programme The Special Assignee Relief Programme (SARP) is being extended for five years, to 31 December 2030. From 1 January 2026, an annualised salary of €125,000 or above will be required to qualify for the relief. New entrants to the scheme from 2026 onwards may benefit from an income tax exemption on 30 percent of relevant annual employment income between €125,000 and €1 million. This change will not apply to existing claimants who continue to avail of SARP in 2026 and further years. Simplification of certain relevant administrative requirements are expected to be announced in Finance Bill 2025. Foreign Earnings Deduction The Foreign Earnings Deduction (FED) will be extended for a further five years, up to 31 December 2030. In addition, from 1 January 2026, the scheme will be enhanced by increasing the cap on qualifying employment income for Income Tax relief from €35,000 to €50,000. The scope of the relief is also to be broadened to include qualifying workdays spent in the Philippines and Turkey. Changes will also be introduced in Finance Bill 2025 to streamline certain administrative requirements. Participation exemption for certain foreign dividends The participation exemption for foreign dividends, introduced in the Finance Act 2024, marked a significant enhancement to Ireland’s tax framework. The Minister announced that several changes to the exemption will be provided for in Finance Bill 2025 which include: Broadening the geographic scope to include qualifying dividends received from jurisdictions that apply a non-refundable dividend withholding tax. The period for which companies must have been resident in a jurisdiction within the geographic scope of the relief before paying a dividend will be reduced from five years to three years. Clarification was provided that the acquisition of a shareholding is not considered to be an acquisition of business assets for the purposes of the participation exemption. The Institute welcomes these changes as we had previously raised these recommendations in a letter which you can read here. Further details will be set out in Finance Bill 2025. Film Tax Credit The Film Tax Credit is being enhanced to introduce a new 40 percent rate for productions with a minimum eligible expenditure of €1 million on relevant Visual Effects work. The rate will apply on qualifying expenditure up to a maximum of €10 million per production. The changes are subject to approval by the EU. Digital Games Tax Credit The Digital Games Tax Credit is being extended by six years to 31 December 2031. In addition, the credit is being enhanced to allow for claims in respect of Post-Release Content work, subject to certain conditions being satisfied. The changes are subject to approval by the EU. Accelerated Capital Allowances for Energy Efficient Equipment The Accelerated Capital Allowances Scheme for Energy Efficient Equipment which provides for an accelerated deduction of 100 percent of the asset cost in year one for qualifying equipment is being extended to 31 December 2030. Accelerated Capital Allowances for Gas Vehicles and Refuelling Equipment The Accelerated Capital Allowances Scheme for gas vehicles and refuelling equipment is being extended to 31 December 2030. This scheme provides a tax incentive for companies and unincorporated business that invest in vehicles which run on compressed natural gas, liquefied natural gas, biogas or hydrogen, and in related refuelling equipment. Capital Allowances for Intangible Assets The Minister indicated that amendments are being made to the intellectual property capital allowances legislation regarding how balancing allowances, which arise on certain events such as the disposal or transfer of the asset, can be used. A Financial Resolution will be brought forward on the night of Budget 2026 to provide for these amendments with immediate effect and will be followed by legislation in Finance Bill 2025. Capital Gains Tax Revised Entrepreneur Relief The lifetime limit on which the Revised Entrepreneur Relief can be claimed will be increased to €1.5 million from 1 January 2026. The relief now provides for a reduced rate of CGT of 10 percent on gains of up to €1.5 million, over a lifetime, arising from the disposal of qualifying business assets. Bank Levy The Bank Levy is being extended for a further year and will apply in 2026. Withholding Taxes As part of his Budget speech the Minister announced that a public consultation on withholding tax will be launched soon.

The need for a whole-of-government approach to tackle the ongoing housing crisis is well accepted by now. The Institute has called for tax-based levers to address the ongoing market failure in delivering affordable housing at scale and at speed. Today’s Budget includes some important changes to key reliefs as well as new measures which, if properly implemented and legislated, should have a positive impact on the construction of buildings and utilisation of land in Ireland. VAT on New Apartments You can read a full update on the announcements under our VAT section here. Residential Development Stamp Duty Refund Scheme You can read a full update on the announcements under our Stamp Duty section here. Deduction for retrofitting by landlords The tax relief available to landlords for qualifying retrofitting expenditure on rented residential properties has been extended by a further three years, now applying until 31 December 2028. In addition to the extension, two key enhancements have been introduced: Timing of relief: The deduction may now be claimed in respect of the year in which the expenditure is incurred, rather than being deferred. Scope of relief: The maximum number of properties for which a landlord may claim the relief has increased from two to three. These changes aim to further incentivise energy efficient improvements in the private rental sector. Corporation tax exemption for cost rental income The new corporation tax exemption for cost rental income will apply to rental profits derived from residential properties designated as Cost Rental to accelerate the delivery of affordable housing. The exemption will apply from 8 October 2025. Cost Rental is a tenure model established under Part 3 of the Affordable Housing Act 2021, aimed at supporting moderate-income households who fall outside the eligibility criteria for social housing. Strict eligibility criteria and operational rules apply to ensure transparency and alignment with the scheme’s objectives. Enhanced corporation tax deduction for apartment construction costs The enhanced corporation tax deduction allows developers to claim 125 percent of qualifying construction costs, subject to a cap of €50,000 in additional deductible costs per apartment unit. The measure is aimed at improving the financial viability of apartment development projects by bridging the gap between development costs and achievable market prices. Key features of the measure include: Deduction rate: Qualifying construction costs will attract a deduction of 125 percent, capped at an additional €50,000 per unit, equating to a maximum tax benefit of €6,250 per apartment. Ownership requirement: The developer must be the beneficial owner of the property at the time of completion. Project size: Relief is available for developments comprising 10 or more apartments. Eligible projects: Applies to both new-build and conversion projects, including changes of use (e.g. office or retail to residential). Timing: Relief is available for projects where a Commencement Notice is submitted between 8 October 2025 and 31 December 2030. Claim point: The deduction becomes claimable upon completion, evidenced by the signing of the Certificate of Compliance. Living City Initiative A number of enhancements to the Living City Initiative were announced today. The initiative supports the regeneration of older housing and commercial stock in designated Special Regeneration Areas. The key changes announced include: Extension of the initiative to 31 December 2030. Expansion of eligibility: The qualifying building age for owner-occupier and rented residential relief is increased from pre-1915 to pre-1975. New relief category: A tax deduction will now be available for the conversion of commercial properties into residential units, including ‘over the shop’ premises. Notably, no building age restriction will apply to this category. Increased relief cap for enterprises: Where works are carried out by businesses, the maximum relief available will rise from €200,000 to €300,000, in line with EU State Aid thresholds. Greater flexibility in claiming the relief will be introduced, with further operational details to be outlined in Finance Bill 2025. In addition, the scheme will be extended to five regional centres identified under the National Planning Framework: Athlone, Drogheda, Dundalk, Letterkenny, and Sligo. The process of mapping Special Regeneration Areas in these locations will commence shortly, in collaboration with the relevant Local Authorities. Residential Zoned Land Tax (RZLT) Budget 2026 introduces further refinements to the RZLT framework, aimed at improving fairness and administrative clarity for landowners. Key updates include: Additional submission window: Landowners will be given a further opportunity to request a change in zoning for land included on the revised 2026 RZLT map. In certain cases, successful submissions may result in an exemption from RZLT for 2026. Exemption during planning appeals: A new exemption will apply where An Coimisiún Pleanála proceedings are initiated by a third party in relation to a grant of planning permission for a relevant site. RZLT will not apply while such proceedings are pending. Legislative amendments: Consequential changes arising from the Planning and Development Act 2024, along with technical amendments to ensure the RZLT legislation operates as intended, will be included in Finance Bill 2025. These measures aim to support landowners navigating zoning and planning complexities, while maintaining the policy objective of encouraging the activation of zoned residential land.

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.”