In October’s edition of Finance Dublin’s Irish Tax Monitor Angela Fleming, Partner & Head of Financial Services Tax, highlights key aspects of Ireland's Budget 2025 that affect its competitiveness as a hub for international business. Notably, the introduction of a new participation exemption regime for dividends from subsidiaries in EU and treaty countries, effective from January 1, 2025. There is ongoing work to potentially widen the geographic scope and introduce a foreign branch exemption in future years. Additionally, she emphasises the need to simplify interest deductibility rules to enhance Ireland’s business appeal.
In addition, Kevin O’Donohoe, Senior Manager, Transfer Pricing, discusses a landmark decision by the Irish Tax Appeals Commission in a transfer pricing case involving share-based awards. The ruling overturned Revenue’s assessment, stating that share-based awards granted by a US parent to employees of its Irish subsidiary do not represent an economic cost to the subsidiary. The decision, which aligns with OECD Transfer Pricing Guidelines, highlights the importance of economic substance over accounting treatment in transfer pricing.
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In addition, Kevin O’Donohoe, Senior Manager, Transfer Pricing, discusses a landmark decision by the Irish Tax Appeals Commission in a transfer pricing case involving share-based awards. The ruling overturned Revenue’s assessment, stating that share-based awards granted by a US parent to employees of its Irish subsidiary do not represent an economic cost to the subsidiary. The decision, which aligns with OECD Transfer Pricing Guidelines, highlights the importance of economic substance over accounting treatment in transfer pricing.
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