Ireland’s recent Budget 2026 and the associated draft legislation in Finance Bill 2025, did not contain any significant surprises or uncertainty. Ireland’s corporation tax regime and tax rate of 12.5% remains stable and certain. Some key legislative updates are as follows:

Foreign Branch Participation exemption

As expected and consistent with our prior communications, Finance Bill 2025 did not introduce a foreign branch exemption. Despite ongoing industry advocacy highlighting the exemption’s potential benefits—such as simplifying tax compliance and enhancing competitiveness—this measure has not been implemented in Ireland. It remains important that the insurance industry keeps this issue firmly on the agenda and maintains high levels of engagement with the Department.

Participation Exemption for Foreign Dividends

Following the introduction of the Participation Exemption for Foreign Dividends by the Finance Act 2024, Budget 2026 confirmed the below amendments to the Participation Exemption following recent feedback and engagement:

• The geographic scope of the dividend participation exemption has been broadened to encompass territories where non-refundable withholding taxes apply.
• The required period for companies to have been resident in a jurisdiction within the geographic scope of the relief has been shortened from five years to three years.
• It has been clarified that the acquisition of a shareholding will not be considered an acquisition of business assets for the purposes of the participation exemption.

These amendments are welcomed improvements to the new dividend participation exemption, reflecting ongoing collaboration and dialogue with industry stakeholders. However, there are a number of improvements that practitioners continue to seek, in particular the further expansion of the geographic scope.

E-Invoicing Updates

In line with the announcements made in the Budget 2026, Revenue has issued further details here on the phased roll-out of domestic e-invoicing and real-time reporting (RTR) requirements. These updates bring Ireland into closer alignment with European digital taxation standards, marking a significant transition in the way domestic B2B transactions are processed and reported.

Phased Implementation of E-Invoicing:

• Phase 1 (November 2028): Large corporates will be required to adopt e-invoicing and RTR for domestic B2B transactions. Although the definition of "large corporates" remains pending, Revenue has indicated this phase targets a small subset of businesses with international experience in similar systems.
• Phase 2 (November 2029): Extends compliance to all VAT-registered businesses engaged in intra-EU trade.
• Phase 3 (July 2030): Enforces full compliance for all intra-EU B2B transactions, harmonizing with ViDA regulations.

From November 2028, all companies must be equipped to receive e-invoices from their suppliers.

Reform of Ireland’s Taxation Regime for Interest.

Budget 2026, unveiled an Action Plan to reform Ireland’s tax regime for interest. This follows an extensive consultation period on the taxation and deductibility of interest.

The Action Plan lays out a phased approach with a feedback statement due to be published on 21 November in relation to phase one. This phased approach indicates that certain financial services-specific issues—such as rules for ‘Section 110’ companies, Bond Washing, Deposit Interest Retention Tax (DIRT), and Encashment tax— will not be addressed in the first phase.

Withholding Tax (WHT) Developments

Finance Bill 2025 legislated for an improvement of the Dividend withholding tax (“DWT”) exemption for Investment Limited Partnerships (“ILPs”) with the removal of DWT on dividends paid by Irish companies to Irish regulated investment limited partnerships (and equivalent EEA partnerships) where qualifying conditions are met, including a minimum 51% beneficial entitlement and appropriate declarations. Further clarification is required with respect to the interaction between the new exemption and the outbound payment measures but a positive development overall.

A joint initiative involving the Department of Finance and Revenue was also launched following Budget 2026 to conduct a public consultation on the modernization, digitalization, and potential expansion of Ireland’s withholding tax regime.

Exit Tax

Finance bill 2025 reduced in 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) from 41% to 38% with effect from 1 January 2026. A roadmap to further support retail participation is expected in early 2026. No mention was included to the abolishment of the Irish Life Assurance levy, which was recommended in the recent Funds 2030 review.

Insurance Compensation Fund Levy

In a welcome development for the domestic insurance industry, the Central Bank of Ireland will reduce the Insurance Compensation Fund (ICF) levy from 2% to 1% with effect from 1 January 2026. This adjustment, reflects the ICF’s strong financial position and is expected to positively affect a large cohort of domestic consumers with non-life insurance policies.