Tax Update

Irish Budget 2026 and Irish Finance Bill 2025

As part of the Budget 2026 announcements, the Irish Minister for Finance announced an increase in the R&D tax credit to 35% and improvements to the participation exemption for foreign dividends. A number of public consultations were also announced signalling that change is coming in the medium term in a number of areas (see further details in our Matheson Insight here). Finance Bill 2025 was published on 16 October 2025 to implement the changes announced in Budget 2026, together with additional amendments to the Irish tax code.

For large international groups operating in Ireland, the key changes to be aware of are:

• Amendments to the regime that applies to transfers of IP where capital allowances have been claimed in respect of that IP;
• Improvements to the R&D tax credit;
• Improvements to Ireland’s participation exemption for foreign dividends;
• A new provision that specifies how certain foreign bodies corporate should be classified for Irish tax purposes;
• A new exemption from dividend withholding tax for investment limited partnerships; and
• Amendments to Ireland’s Pillar Two rules.

Further details of these changes are included in our Matheson Insight here.

Mandatory eInvoicing and Real-Time Reporting Coming to Ireland

The Irish Revenue Commissioners have announced preparations for implementing mandatory e-invoicing and real-time digital reporting for domestic business-to-business transactions in Ireland. In this Matheson Insight, Tax partners Matthew Broadstock and Dara Higgins discuss how this modernisation of Ireland’s VAT systems will affect Irish businesses.

Pillar Two Progress in OECD Report to G20 Finance Minister

The OECD has issued a report to the G20 Finance Ministers. It includes an update on the progress regarding Pillar Two and confirms that:

• The side-by-side solution is being discussed at OECD level “with an aim to expeditiously reach a solution that is acceptable and implementable while maintaining the overall integrity of the global minimum tax framework”.
• Work is continuing on a safe harbour for MNE Groups operating in high tax jurisdictions – a simplified ETR calculation is being developed for such situations and it is intended that the safe harbour will be finalised before the end of the year.
• Work is being undertaken at a forum described as the “Amsterdam Dialogue” on improving coordination and consistency in the administration of the global minimum tax. This forum is expected to deliver best practices, further guidance on compliance and may agree common approaches or tools to improve efficiency and simplicity in administration of the global minimum tax.

Commission Work Programme – Withdrawal of Certain Legislative Proposals

In the Commission Work Programme issued by the Commission on 21 October 2025, the EU has officially withdrawn its proposals on DEBRA, Unshell, the Transfer Pricing Directive and the Financial Transactions Tax.

OECD MAP and APA Statistics for 2024

On 31 October 2025, the OECD published statistics on Mutual Agreement Procedures (“MAPS”) and Advance Pricing Agreements (“APAs”) as well as announcing its Competent Authority awards.

Ireland was awarded most improved jurisdiction for APAs with a 900% increase in the number of APAs granted in 2024 compared to 2023 (from 1 to 10 cases). This reflects the significant uptake of the Irish APA programme by taxpayers in Ireland, as taxpayers seek bilateral and multilateral certainty amid international tax reform and tax challenges.

The OECD’s statistical breakdown on Ireland for 2024 (here) provided the following insights:

MAPs

• In 2024, Ireland closed 68 MAP cases, approximately 37% of which were transfer pricing related cases. 62 new cases were commenced, 50% of which were transfer pricing cases. As of the end of 2024, Ireland had a total of 171 open MAP cases.
• Ireland continues to resolve the majority of its MAP cases by agreeing to fully eliminate double tax. In 2024, the percentage of cases resolved by agreement to fully eliminate double tax was 60% for transfer pricing cases and 81% for non-transfer pricing cases.
• The average time to close a transfer pricing MAP case was 35.57 months. For non-transfer pricing cases, the average timeframe was 17.62 months.

APAs

• During 2024, Ireland started 23 new APA cases and as of the end of 2024, Ireland had a total of 80 open APA cases.
• As mentioned above, Ireland concluded ten APAs in 2024.