In September’s edition of Finance Dublin’s The Irish Tax Monitor BDO Ireland Tax experts outlined pre-budget recommendations for Budget 2025 across five key areas.
For investment funds, Angela Fleming, Partner & Head of Financial Services Tax, advocates for tax changes such as extending Dividend Withholding Tax exemptions for ILPs and introducing a participation exemption to enhance Ireland’s competitiveness. In housing, Derek Henry, Partner & Head of Tax, calls for radical intervention, recommending a capital allowance scheme and reduced CGT/Income tax rates to stimulate residential development. For SMEs, Cian O’Sullivan, Partner, Private Clients, proposes simplifying the Employment Investment Incentive Scheme, reducing the CGT rate, and eliminating the 3% USC surcharge on non-PAYE income to support entrepreneurship. Lee Kavanagh, Manager, Tax, stresses the need for tax simplification, including revising outdated legislation and creating an Office of Tax Simplification. Finally, in FDI and Financial Services, Yvonne Diamond, Senior Manager, Tax, expects crucial changes like the introduction of a participation exemption for foreign dividends, alongside developments in Ireland’s interest deductibility rules and EU tax directives.
In addition, Angela Fleming, Partner & Head of Financial Services Tax, discusses the second feedback statement on the participation exemption for foreign dividends, published in late August. Building on her earlier coverage in the April edition of Irish Tax Monitor, Angela focuses on new developments, noting the short 7-day consultation period due to the approaching Budget and Finance Bill. The statement outlines key draft legislative elements, including the participation exemption applying to distributions from subsidiaries tax-resident in EU/EEA and DTA countries starting 1 January 2025, with options for companies to opt in annually. It also addresses consequential amendments needed in the Irish tax code, such as the Controlled Foreign Companies regime and transfer pricing rules. The final structure of the participation exemption will be informed by responses to this second statement, which were due by 5 September.
For investment funds, Angela Fleming, Partner & Head of Financial Services Tax, advocates for tax changes such as extending Dividend Withholding Tax exemptions for ILPs and introducing a participation exemption to enhance Ireland’s competitiveness. In housing, Derek Henry, Partner & Head of Tax, calls for radical intervention, recommending a capital allowance scheme and reduced CGT/Income tax rates to stimulate residential development. For SMEs, Cian O’Sullivan, Partner, Private Clients, proposes simplifying the Employment Investment Incentive Scheme, reducing the CGT rate, and eliminating the 3% USC surcharge on non-PAYE income to support entrepreneurship. Lee Kavanagh, Manager, Tax, stresses the need for tax simplification, including revising outdated legislation and creating an Office of Tax Simplification. Finally, in FDI and Financial Services, Yvonne Diamond, Senior Manager, Tax, expects crucial changes like the introduction of a participation exemption for foreign dividends, alongside developments in Ireland’s interest deductibility rules and EU tax directives.
In addition, Angela Fleming, Partner & Head of Financial Services Tax, discusses the second feedback statement on the participation exemption for foreign dividends, published in late August. Building on her earlier coverage in the April edition of Irish Tax Monitor, Angela focuses on new developments, noting the short 7-day consultation period due to the approaching Budget and Finance Bill. The statement outlines key draft legislative elements, including the participation exemption applying to distributions from subsidiaries tax-resident in EU/EEA and DTA countries starting 1 January 2025, with options for companies to opt in annually. It also addresses consequential amendments needed in the Irish tax code, such as the Controlled Foreign Companies regime and transfer pricing rules. The final structure of the participation exemption will be informed by responses to this second statement, which were due by 5 September.