Budget bid to simplify tax rules for firms
Tax lawyers at William Fry have highlighted several announcements in Budget 2027 that will affect domestic and international businesses.
For domestic firms, they point to the simplification of the rules on preliminary corporation tax and interest relief in the upcoming Finance Bill, and an extension of the main start-up and investor reliefs, subject to EU state-aid rules.
Changes were also announced to professional-services withholding tax, with personalised deduction rates replacing the current 20% flat withholding rate on gross payments.
There are also changes to reporting requirements to reduce the administrative burden on relevant taxpayers – including an option for employers to either make monthly returns or continue with the current real-time reporting.
'Few changes' on property
In an analysis, the lawyers say that there were “few material changes” in the housing and property sector.
The rent tax credit rises by €150, the Help to Buy refund goes up to €35,000, and the rent-a-room relief income ceiling will rise to €16,000.
A new derelict-property tax will replace the old levy system and will be legislated for in the Finance Bill at a rate of 7%.
R&D tax credit
On international tax, the William Fry lawyers highlight several enhancements to the research-and-development (R&D) tax credit and an extension of the knowledge-development box to 2032.
They add that the Finance Bill will introduce legislation to implement the OECD Pillar Two Side-by-Side Package on global minimum-tax rules for multinational companies and to update Pillar Two rules on penalties and filing provisions.
The lawyers note that Finance Minister Simon Harris also flagged several initiatives that will be progressed in 2027.
The ongoing review of Ireland’s tax regime for interest continues, along with a review of the wider taxation of retail investment, deemed-disposal rules, and what the lawyers describe as "other administrative burdens" on investors.
Assessment of business grants
William Fry notes that a holistic assessment of enterprise grants, tax incentives, and business-development programmes will also be undertaken, taking into account the EU state-aid framework.
The minister also confirmed a reduction in the tax rate for certain Irish and equivalent offshore funds, as well as for foreign life-assurance products, from 38% to 35%.
The standard rate of capital gains tax will be reduced from 33% to 31%, with effect from 7 October, though disposals of development land will not be affected.
The firm's lawyers add that the full impact of many of the measures will depend on the detailed provisions of the Finance Bill, expected to be published later this month.