Key measures introduced in the Bill from a financial services perspective are as follows:
Dividend Withholding Tax exemption for payments to regulated partnerships
The Bill brings into legislation a long-awaited dividend withholding tax exemption for payments from Irish companies to an Irish-regulated investment limited partnership (ILP) or an EEA-equivalent partnership. The exemption will be available where:
the partners are beneficially entitled to at least 51% of the ordinary share capital in the dividend paying company;
the ordinary share capital of the dividend paying company is an asset of the ILP/equivalent; and
the investment limited partnership has provided the dividend paying company with the relevant declaration to state it is such an ILP/equivalent.
The interaction with the recently amended outbound payment rules will require further clarification in the context of widely held funds. However, clarification that the ILP will constitute the beneficial owner for the purpose of making the necessary declarations is welcome. Overall, a very positive development for the Irish collective investment product suite — particularly for private assets.
Participation Exemption Regime
The Bill introduces a series of technical amendments to the dividend participation exemption regime established by Finance Act 2024. These amendments represent incremental steps toward enhancing the regime and aligning it more closely to international holding company standards.
Pillar Two and securitisation entities
The Bill helpfully clarifies that orphan-owned entities that are fully consolidated into a multinational entity (MNE) group are considered to be “minority owned constituent entities” (MOCEs) for Pillar Two purposes. The legislation further confirms that a securitisation entity that is a MOCE shall calculate its top-up tax in line with the MOCE provisions (i.e. on a standalone basis), but any resulting top-up tax will be allocated to the other Irish entities that are not securitisation entities.
Although this aligns with the previous interpretation of OECD rules, it is a positive development for the Irish securitisation industry and those entities in scope as it offers certainty of the level of tax to be applied at the securitisation entity level.
Leasing amendments
Section 840A was introduced in Finance Act 2011 to counter perceived base erosion through intra-group asset transfer and financing arrangements that generated Irish interest deductions. Its broad drafting captured assets such as aircraft and loans, inadvertently impacting genuine commercial transactions and group reorganisations.
Revenue later issued eBrief 11/11 to carve out certain assets — such as those used in leasing trades — but its removal late last year has created uncertainty, particularly for the leasing sector where intra-group transfers are common.
The Bill introduces a new subsection to Section 840A, providing a carve-out from interest restrictions where specific conditions are met:
the seller must have borrowed to acquire the asset and claimed a tax deduction in Ireland;
the lender must be taxable in Ireland, the EU or a DTA country; and
the loan must be commercially motivated, not tax-driven.
Importantly, the buyer’s deductible interest is capped by the seller’s outstanding principal immediately before the sale. Where only part of the seller’s borrowings relate to the asset, a “just and reasonable” apportionment is allowed. This cap presents practical challenges, especially in tracing historic debt and accommodating commercial financing structures. It may also lead to inequitable outcomes in Irish-to-Irish transactions that were not the original intent of the legislation.
The new rules apply to transfers of assets within the scope of Section 840A that take place on or after 1 January 2024, thus opening the door to potential self-corrections in respect of transfers in 2024. The impact of this retrospective application will need to be considered further in the coming days.
These revisions add complexity at a time when a broader consultation is expected to simplify the interest regime. Given the evolved tax landscape and existing anti-avoidance rules, the continued relevance of Section 840A is increasingly questioned, and this latest amendment is seen as a missed opportunity for reform.
Retail investment
The tax rate on payments made from Irish funds, equivalent offshore funds, as well as Irish and foreign life assurance policies to Irish individual investors (i.e. exit tax and life assurance exit tax) has been lowered from 41% to 38% with effect from 1 January 2026. While we had hoped that the eight-year deemed disposal rule would be abolished and that the exit tax and life assurance exit tax rates would be fully aligned with the 33% rate of capital gains tax (CGT) in this year’s Bill, it is hoped that the reduced exit tax is but a first step and that the 2026 roadmap announced in Budget 2026 will provide a clear timeframe to address and implement the remaining recommendations in the ‘Fund Sector 2030’ Report.
Technology and innovation
Ireland is well-positioned to be a leading innovator in the global financial services industry by harnessing our position as both a leading financial services hub and the extensive digital skills within our economy, linked to the presence of some of the largest technology companies in the world. The stepped-up R&D credit (to 35%) with cleaner payment mechanics, clearer continuity and carry-forward rules for specified intangible assets in reconstruction scenarios are all welcome in this context.
These measures, in addition to a refinement of the Special Assignee Relief Programme (SARP), signal a clear intention to optimise Ireland’s tax system for international investment both in the financial services space and beyond.
Crypto-Asset Reporting Framework (CARF)
The OECD’s CARF ushers in a new era of automatic exchange of information for crypto-assets, closing long-recognised transparency gaps as activity shifts away from traditional intermediaries. DAC 8 introduces new tax transparency rules for crypto-assets within the EU, adopting the CARF for that purpose.
Ireland has implemented DAC 8 through the Bill, with the first reporting under CARF due by 31 May 2027 in respect of the 2026 reporting period. Reporting Crypto-Asset Service Providers (RCASPs) must register with Revenue by 31 December 2026.
The CARF provides for the automatic exchange of tax relevant-information on crypto-assets. An individual or entity is deemed to be a RCASP if, as a business, it provides a service effectuating exchange transactions for, or on behalf of, customers in respect of relevant crypto assets. Notably, CARF requires transaction-level reporting and imposes several due diligence obligations on RCASPs.
Entities and individuals should now assess whether they should be viewed as RCASPs under CARF and begin upgrading systems and processes to effectively manage obligations.
Common Reporting Standard (CRS) 2.0
In addition to implementing the CARF, and following a comprehensive review by the OECD, DAC 8 also adopted the changes to CRS/DAC 2.
These amendments are designed to capture emerging financial assets and products that serve as alternatives to traditional offerings, and to bring additional entities within the scope of the CRS. Among other updates, enhanced due diligence obligations have been introduced as well as several changes to the reporting obligations.
Other financial services measures
Exempt unit trusts
Chargeable gains accruing to exempt unit trusts may no longer be treated as wholly exempt from CGT where the units in the EUT are held by an investment undertaking.
Auto-enrolment and investment undertakings
Participants in an auto-enrolment scheme have been added to the list of Irish investors exempt from exit tax on payments from Irish investment undertakings.
Foreign body corporates
A new Section 1009A provides that a foreign body corporate and its members will be chargeable to tax on the basis that the foreign body corporate is a partnership, where it is substantially similar to an Irish partnership. This amendment provides legislative clarity to taxpayers. However, it may interact with several other tax provisions relevant to cross-border structures which should be monitored as we move through the legislative process.
Bank levy
The bank levy has been extended for another year with changes to the base year and the rate. The levy to be charged in 2026 will be based on the eligible deposits held by each relevant institution as at the end of 2024 (previously 2022). The rate of levy applied to the base has been changed from 0.112% to 0.1025% for 2026, to achieve the target yield of €200 million.
Life assurance
No reference was made to the 1% life assurance levy, which the industry hopes will be abolished off the back of the recommendations included in the Funds Sector 2030 report. However, the implementation plan refers to ‘detailed consideration’ being given to the recommendations in this area.
As noted, however, the exit tax rate on life assurance policies will be reduced from 41% to 38%.
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