The key measures introduced in the Bill include the following:
The Special Assignee Relief Programme (SARP) has been renewed for a further five years, with an increase to the minimum income threshold to €125,000 from 2026. There has been some relaxation in the requirement to ensure the employer certification is completed within 90 days of the individual’s arrival in the State. This point is discussed in further detail below.
Foreign Earnings Deduction (FED) relief will be increased to €50,000 from 2026, extended for a further five years and its scope has widened to include the Philippines and Turkey.
Company car benefit-in-kind (BIK): the current €10,000 company vehicle open market value (OMV) deduction has been extended by one year into 2026. It will then reduce to €5,000 in 2027 and €2,500 in 2028 before being abolished in 2029.
A new vehicle category for zero emission cars will apply with BIK rates of between 6-15% from 2026. The threshold for entering the highest mileage band (where a lower BIK rate applies) has been permanently reduced from 52,001km to 48,001km from 1 January 2026.
The Rent Tax Credit has been extended for three years to the end of 2028. The credit remains unchanged at up to €1,000 per person.
Mortgage interest relief was extended for a further two years (2025 and 2026), with a reduced value applying in the final year (2026).
PRSI increases already took effect as of 1 October 2025, with further increases legislated through 2028.
An increase in the lifetime limit for entrepreneur relief from €1m to €1.5m.
A reduction in income tax rate on income and gains arising on certain offshore funds from 41% to 38%.
Extension of the KEEP scheme to the end of 2028.
Changes to what is deemed to be an “excepted asset” for the purpose of Capital Acquisitions Tax (CAT) Business Relief as well as to the clawback rule, where the full sales proceeds are not reinvested.
An extension of charge to CAT in certain instances where an individual disposes of their interest in a life assurance policy.
An extension on accelerated allowances for energy efficient equipment to 31 December 2030 and for slurry storage to 31 December 2029.
A reduction in VAT from 13.5% to 9% for hospitality, hairdressing and the supply of completed apartment units.
A new provision regarding the taxation of foreign body corporates that are substantially similar to Irish partnerships.
Special Assignee Relief Programme
The Special Assignee Relief Programme (SARP) has been renewed for a further five years, with an increase to the minimum income threshold to €125,000 for those arriving in Ireland on or after 1 January 2026.
There has also been a noteworthy administrative amendment, which provides that the employee will qualify for the relief where the employer certification is made after 90 days but within 180 days of the employee’s arrival in the State. However, relief will be restricted to a maximum of four consecutive tax years. In essence, the first year of relief will be lost but claims can be made for years two to five. Under existing provisions, where the employer certification is not made within the current 90-day window, SARP relief is not available for any year.
The annual employer end-of-year SARP return deadline has also been extended to 30 June in respect of the 2025 tax year and subsequent years.
The extending measures announced will ensure the relief remains of significant benefit to employers in the relocation of key employees to Ireland.
Company car BIK changes
The current €10,000 company vehicle OMV deduction previously introduced as a temporary cost of living measure has been extended by one year into 2026. It will then reduce to €5,000 in 2027 and €2,500 in 2028, being abolished from 2029.
A new vehicle category for zero emission cars will apply with BIK rates of between 6-15% from 2026. Additionally, the lower mileage limit in the highest mileage band that applies to employer-provided cars will remain at 48,001km permanently.
Foreign Earnings Deduction
Foreign Earnings Deduction (FED) relief will be increased to €50,000 from 2026. FED is also extended for a further five years and scope has widened to include the Philippines and Turkey. In addition, the definition of a “qualifying day” is amended to remove the requirement for an individual to spend three consecutive days working in a relevant state. However, it also provides that the relief will be not available where an individual chooses to spend time working in a relevant state for personal reasons.
Entrepreneur Relief
The Bill proposes an increase in the Entrepreneur Relief (ER) lifetime chargeable gain threshold from €1 million to €1.5 million. The increase in this lifetime chargeable gain threshold will come into effect from 1 January 2026. The Bill provides that any chargeable gains arising between 2016 and 2025 on which ER is claimed will be capped at €1 million for the purpose of calculating the available threshold.
VAT reduction
The VAT reduction for food and catering businesses, hairdressing services, and the sale of completed apartments will be relevant for private businesses. Further details of the changes are included in the VAT section.
CAT Business Relief
The Finance Bill introduces a provision, which provides that an asset will not be an “excepted asset” for business relief purposes at the date of the gift/inheritance if it is required to be used for a specific purpose of the business within the subsequent six-year period. If the asset in question is not used for that purpose within six years, Business Relief will be withdrawn on that asset, unless it can be demonstrated to the contrary that the asset is to be used for the purposes of the business.
It is further proposed, in relation to gifts/inheritances taken after 1 January 2026, that where property on which business relief was claimed is disposed of within six years and the full proceeds are not reinvested in other property that would qualify for business relief, the relief will be clawed back in full.
Key Employee Engagement Programme
It is proposed that the Key Employee Engagement Programme (KEEP) is extended to 31 December 2028. This extension is subject to state aid approval. The scheme was due to cease at the end of 2025. The conditions of KEEP remain unchanged.
Accelerated Capital Allowances
There has been an extension to the Accelerated Capital Allowances schemes for energy efficient equipment, gas, hydrogen vehicles and refuelling equipment for trading purposes from 31 December 2025 until 31 December 2030. Accelerated allowances for capital expenditure incurred on slurry storage has also been extended from 31 December 2025 until 31 December 2029.
Taxation of foreign body corporates
This new section provides that a foreign body corporate and its members will be chargeable to Irish tax on the basis that the foreign body corporate is a partnership, where the foreign body corporate has similar characteristics to an Irish partnership and the rights and obligations of its members are substantially similar to the rights and obligations of partners of an Irish partnership.
Menu