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 Minister’s Roadmap includes a series of consultation questions inviting views from stakeholders to assist with the specific design of a participation exemption for foreign dividends.
Interested stakeholders will also have the opportunity to provide their views on the possible introduction of a foreign branch participation exemption. The Minister wishes to assess the potential benefits and impacts of such an exemption before reaching a final decision on its introduction.
Grant Thornton View
The announcement of the roadmap towards a participation exemption on foreign-sourced dividends is a very welcome development. We would hope that this is closely followed by a foreign branch participation exemption. The adoption of a full territorial regime will bring Ireland in line with other EU and OECD countries, simplify our corporation tax system and help retain Ireland’s position as the ideal location for international groups during a period of critical change in the global tax environment.
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