Supporting business growth – Chartered Accountants Ireland launches Pre-Budget 2027 Submission

Last week, Chartered Accountants Ireland, launched this year’s Pre-Budget 2027 submission, titled “Progressing tax policy – supporting business growth, competitiveness and resilience”. You can read the full submission here. 

In our submission, we emphasise the importance of a balanced and disciplined policy response that prioritises capital investment, supports work and investment through the tax system, and reduces unnecessary complexity. This approach is reinforced by findings from the Chartered Accountants Ireland and GRID Finance’s SME Business Sentiment Survey, which highlight that businesses’ immediate priorities are managing rising costs and navigating tax complexities. 

To address rising costs, we recommend that the Government aligns income tax thresholds and credits with inflation to protect real wages and progressively reduce the CGT rate to at least 20 percent to lower the cost of investing and doing business in Ireland. In addition, simplification measures should be prioritised, with a particular focus on reducing unnecessary reporting requirements, particularly by aligning the filing of information under the Enhanced Reporting Requirements with the payroll cycle. 

Our submission looks at top priorities for Budget 2027 and considers other key areas for reform, some of which are currently under review by the Department of Finance.  The top priorities include:  

• Protection of real wages to ease cost pressures  

Income tax thresholds and credits should be aligned with inflation to support employees’ take-home pay, to help mitigate upward pressure on employer wage costs and avoid fiscal drag. Fiscal drag occurs when inflation or income growth pushes taxpayers into higher tax brackets, increasing their effective tax burden despite unchanged rates. As a result, it acts as a “stealth tax,” raising government revenue while reducing households’ disposable income. 

• Measures to reduce the cost of investing and doing business 

A clear pathway towards a more competitive capital gains tax (CGT) rate should be established. We believe that adopting a more moderate CGT rate would enhance the neutrality of the tax system, minimise economic distortions, and support more efficient decision-making. 

We recommend enhancements to the tax treatment of investments in Irish regulated funds by Irish investors and are calling for the deemed disposal rules to be abolished.  We strongly support the introduction of an Investment Account and outline our recommendations in this regard.  

• Simplification of the tax system, particularly for SMEs 

Measures that reduce compliance burdens are urgently required, and we recommend areas which require changes, such as removing the real-time reporting requirement for the enhanced reporting of benefits to Revenue, a simplification of the corporation tax returns and the modernisation of VAT compliance (albeit with appropriate safeguards for smaller businesses).  

• Removal of targeted distortions in the tax system 

Certain aspects of the Tax Acts discriminate against professional service providers. In addition, the current treatment of employer-funded professional subscriptions is contrary to the economic benefits that naturally accrue to companies who employ professionally qualified staff.  

For Budget 2027, we are calling for the removal of the 3 percent USC surcharge on non-employment incomes. This measure was introduced as a temporary measure in Finance Act 2011. We are also calling for the repeal of the benefit-in-charge on company-paid professional subscriptions to support businesses and recognise the contribution of professional services to the wider economy. These measures will support competitiveness and align with international best practice. 

• Prioritisation of investment in critical infrastructure 

Infrastructure gaps in housing, energy, water, and transport have become significant constraints on productivity and investment. We recommend directing public investment towards these areas to reduce business costs, enhance productivity, and support sustainable growth. 

Our Pre-Budget Submission also outlines the paramount importance of upholding privacy at the Tax Appeals Commission to preserve a tax appeals system that is transparent and fair. The proposals in the Finance (Tax Appeals and Fiscal Responsibility) Bill 2025 have been a focus of our advocacy efforts in recent months, as reported several times here in the Tax Newsletter.  

Finally, as consultation and discussion have progressed across several areas in recent months, the Institute has been actively contributing to the Department of Finance as it continues to consider enhancements to the R&D tax credit; progresses Phase One of its review of Ireland’s taxation regime for interest; and, address barriers to an all-island labour market. We acknowledge the ongoing work within Government on these areas, and the Institute will continue to engage closely as this work advances.