Insights

Budget 2024 and Finance (No. 2) Bill 2023 announced a package of wide-ranging measures to support Irish enterprise, which Minister for Finance Michael McGrath believes will make a very positive difference and encourage more businesses to engage with the R&D regime.

DAC8 enters into force on 13 November 2023 and for the most part will come into effect for all EU Member States from 1 January 2026. Read the key measures introduced to enhance tax compliance and improve transparency.

On 17 October 2023, the Council of the EU adopted DAC8, the 7th amendment to the Directive on Administrative Cooperation (“DAC”) directive amending EU rules on administrative cooperation in the area of taxation. The Directive will enter into force on 13 November 2023, and Member States will have until 31 December 2025 to transpose the Directive into national law, after which the provisions would come into effect as of 1 January 2026.

Minister McGrath in Budget 2024 announced an extension of the temporary measures introduced in 2023 with respect to the Benefit in Kind (BIK) charging regime for company provided vehicles.

The European Commission (EC) are committed to introducing a common corporate income tax system across the EU. The previous iterations - the Common (Consolidated) Corporate Tax base (CCCTB) 2011 and Common Corporate Tax Base (CCTB) are now withdrawn and replaced with the BEFIT Proposal. It remains to be seen if BEFIT will achieve the unanimous support required from Member States.

The Minister for Finance Michael McGrath has announced a plan to exempt foreign-sourced dividends from Irish corporate tax in a move toward the territorial regime of taxation. The proposed exemption will take shape over the coming months before being introduced in Finance Bill 2024, with effect from 2025.

The European Commission (EC) has adopted key initiatives, which aim to reduce compliance costs for large businesses operating across the European Union. The BEFIT proposal introduces a single set of rules to determine the tax base for large businesses that operate out of more than one Member State.

The Defective Concrete Products Levy (“DCPL”) was introduced in Finance Act 2022 and came into force on 1 September 2023.

Throughout 2023, the OECD Inclusive Framework has continued its work on the development of the Pillar Two Global anti-Base Erosion Rules in advance of the introduction of the rules on 31 December 2023.

Employment Tax Updates covering: Enhanced Reporting Requirements (ERR), Small Benefit Exemption, Shares Options – Revenue’s Compliance Focus and PAYE Revenue Audits

Finance Act 2022 introduced the requirement for employers to notify Revenue of certain payments made to employees known as ‘reportable benefits’. The introduction of this reporting requirement is subject to a commencement order; however, the target implementation date is 1 January 2024.

The introduction of Pillar Two brings unprecedented changes to the international tax landscape, the likes of which haven’t been seen for decades. The rules will create a fundamental shift in the way certain groups are taxed as well as an additional global compliance and reporting obligation for those within scope of the rules.