Finance Act 2019, which was signed into law on 22 December 2019, features some significant measures with implications for businesses in Ireland, including EU and OECD rules becoming part of Irish law.
The Act provides for the legislative amendments required to implement many of the Budget Day announcements of 8 October 2019.
The most significant measures include the extension of the scope and application of transfer pricing rules and the introduction of anti-hybrid rules required by the EU's anti-tax avoidance directives (ATAD). These headline measures continue to show Ireland's commitment to ensuring that its corporation tax code is in line with international best practice and represent further milestones in the corporation tax roadmap.
The Act also implements some changes to the Real Estate Investment Trust (REIT) regime and the taxation of Irish Real Estate Funds (IREFs). Amendments to strengthen and broaden the application of existing anti-avoidance rules applicable to securitisation companies have also been included in the Act.
Welcome improvements to the operation of KEEP, EIIS and the R&D tax credit regime are contained in the Act which will be of particular interest to SMEs. The Irish tax system has an important role in both encouraging entrepreneurship and shaping Ireland's future, and these changes are encouraging.
Other measures include an increase in the rate of dividend withholding tax, the introduction of the new EU mandatory disclosure regime and amendments to the R&D regime. A number of measures have also been included to ensure that there will be no change in the treatment of certain transactions with UK companies in the event of a no-deal Brexit.