Angela Fleming, Partner & Head of Financial Services Tax, BDO: Ireland currently faces significant economic uncertainties. These uncertainties are greater than historical levels due to geopolitical tensions (e.g. increased geopolitical tension in the Middle East) and the imposition by the US of worldwide tariffs on goods imported to the US (discussed further by my colleague Carol Lynch). It is understood that Government are currently in the process of developing a new competitiveness plan for Ireland, which is being brought to Cabinet by Enterprise Minister, Peter Burke. Minister Burke has noted that Ireland must “pivot with purpose” in order to support the indigenous enterprise and foreign direct investment of tomorrow.

It is understood that the new competitiveness plan will look to scale-up funding for SMEs, create a new national artificial intelligence agency, and detail plans to lift the Dublin Airport passenger cap. New tax-based supports that allow SMEs to adopt innovative technologies may be looked at this year as part of the Budget, along with potential expansion of the R&D tax credit regime.

These are all welcome developments, but there are some fundamental changes that could be made to the Irish tax system that impact on Ireland’s competitiveness and significant changes in these areas would represent a step-change for Ireland. The first is the Personal Tax system. I have written before about the heavy tax burden facing individual Irish taxpayers. Marginal Income Tax rates at 52%/55% put Ireland at a significant competitive disadvantage internationally. Recent budgets have seen modest increases in rate bands and tax credits, but these have done little more than offset increases in the cost of living.

Another change that warrants serious consideration is a reduction in the rate of CGT. We pride ourselves on being competitive on tax, and we want to do more to encourage innovation and investment, yet we have a 33% rate of tax on capital gains that is uncompetitive internationally. While there are various reliefs available, as the saying goes “once you’re explaining, you’re losing” – a reduction in the headline rate is what is needed.

It’s time to stop tinkering around the edges and get serious about maintaining Ireland’s hard fought reputation as one of the best countries in the world to do business.

Peter Reilly, Partner, Tax Policy Leader, PwC Ireland: Ahead of Budget 2026 on 7 October, the Government should consider a temporary zero-rating of Irish new-build apartments for VAT which could address affordability concerns and encourage supply of housing. Currently, VAT adds a considerable cost to the final price of new homes, with apartments increasingly seen as uneconomical by developers. By reducing this 13.5% VAT rate, the government could reduce the upfront costs faced by buyers, making homes more affordable for purchasers, and making high-density housing more viable to build in the first place. Although this policy in isolation won’t solve the housing crisis, it would encourage construction activity and support developers in delivering a higher volume of projects, with a better return on investment.

As Ireland faces a critical housing shortage, policies aimed at reducing costs and incentivising construction are urgently needed, and this change would help support longer term delivery of stock to the market.

The cost of such a measure is likely to be significant and would eat into the relatively small budget for tax cuts. However, it would demonstrate the government’s medium to long-term commitment to alleviating the housing crisis, as well as providing immediate relief to would-be homeowners deterred by pervasive high prices.

Deirdre Barnicle, Partner, McCann FitzGerald LLP: The upcoming Budget provides the Government with an opportunity to implement key recommendations as set out by the Department of Finance in the Funds Sector 2030 Report, published in October 2024.

The Funds Sector 2030 Report recommended a number of key tax changes designed to ensure that Ireland maintains its leading position in the asset management and funds servicing industries. It is important that the recommended changes are implemented in a timely manner to protect Ireland’s position in this highly competitive global market.

In particular, we would welcome the removal of the eight-year “deemed disposal” rules, which trigger an exit tax on the eighth anniversary of an investment in an Irish authorised fund for Irish tax resident investors and an alignment of the investment undertaking tax rate (currently 41%) with the current rate of CGT (33%). These amendments (as recommended by the Funds Sector 2030 Report) would remove significant deterrents to investment by Irish individuals in Irish regulated funds.

In addition, we would welcome the introduction of an exemption from Dividend Withholding Tax (DWT) from distributions to Investment Limited Partnerships (ILPs) in the upcoming Finance Act. The Department of Finance has been proactive in relation to this issue, having engaged in a formal consultation process with key stakeholders earlier this year. This change would be consistent with current Irish tax policy as certain other tax-transparent entities e.g. common contractual funds (CCFs) already benefit from such an exemption. It would also be consistent with the position in many other European jurisdictions who do not impose such a withholding tax in these circumstances, and is required in order to ensure that the Irish ILP is competitive with similar vehicles in other jurisdictions.

This article appeared in the September 2025 edition of the Irish Tax Monitor.