Irish tax developments

Participation exemption for foreign dividends: Following its introduction last year, Ireland’s participation exemption for foreign dividends has been substantially amended with effect from 1 January 2026 to ensure the regime functions as intended for groups with global structures. Updates include:

• extending the exemption to dividends paid by subsidiaries tax resident in jurisdictions that apply a non-refundable withholding tax, broadening access to the exemption for multinational groups with subsidiaries tax resident in non-EEA/treaty jurisdictions or emerging markets;
• reducing the look-back period for the “excluded acquisition” rule, which disapplies the exemption where a dividend‑paying company had acquired a business carried on by an entity tax resident in a non-EEA/treaty jurisdiction, from five to three years;
• clarification that the excluded acquisition rule does not apply to share acquisitions or situations where the acquired business was previously carried on by an Irish tax resident company;
• allowing companies tax resident in new treaty jurisdictions to qualify immediately upon signing of the treaty; and
• introducing a mechanism to determine tax residence for companies in jurisdictions without a formal residence concept.

Interest regime reform – Department of Finance Consultation: The Irish government published its Phase One Feedback Statement on potential changes to Ireland’s long-standing interest taxation regime, including potential adoption of a profit-motive-based test, improved alignment in the treatment of different categories of interest income and expense, and broader updates to ensure the regime remains resilient, competitive and aligned with international tax commitments. Stakeholder responses to the first public consultation highlighted the complexity of the existing rules and the need for more detailed consideration before introducing legislative reform. Reflecting this, the government’s action plan provides for a phased approach to reform, with Phase One addressing priority issues identified by stakeholders with further changes to be considered in subsequent phases. The consultation on the Feedback Statement closed on 16 January 2026, and the Department is now assessing submissions to inform the next stage of the reform process. A&L Goodbody’s response to the Public Consultation on the Tax Treatment of Interest can be found here.

Research and Development Tax Credit and Innovation Compass: The Irish government continues to enhance its R&D tax credit regime by:

• increasing the rate of the credit from 30% to 35%, alongside an uplift in the first-year payment threshold; and
• publishing the R&D Tax Credit and Innovation Compass, which identifies areas for further potential reform including qualifying expenditure, outsourcing rules and capital expenditure treatment, which reflects the need to ensure continued alignment with industry practice and international competitiveness. Additional targeted amendments are expected to follow later in 2026.

Tax Appeals Commission – Proposed hearing reforms: The Irish government continues to pursue legislation towards a more transparent tax appeals process which would result in all Tax Appeals Commission hearings being held in public by default, with determinations published in full with only a limited ability to seek private hearings and redacted determinations. This would represent a significant departure from the current practice under which the vast majority of cases are heard in private. Further developments are expected later this year.

Market capitalisation stamp duty exemption: To support smaller publicly listed companies and increase the competitiveness of Ireland’s capital markets, an exemption from the 1% charge to Irish stamp duty for transfers of shares in listed companies with a market capitalisation below €1bn has been introduced effective from 1 January 2026 through to 31 December 2030. To qualify, the shares must be admitted to trading on a “relevant market”, and a notification to Irish Revenue is required. Irish Revenue are maintaining a published list of all valid notifications received. As of 4 March 2026, 21 companies have made a valid notification to Irish Revenue however, as expected, uptake by US-listed companies has been limited given the existing stamp duty exemption for shares traded through DTC.

Date published: 30 March 2026