Revised Entrepreneur Relief
The Revised Entrepreneur Relief provides for a reduced 10% rate of capital gains tax on gains derived from disposing of certain business assets. The lifetime limit of €1 million of gains to which the reduced rate may apply will be increased to €1.5 million from 1 January 2026.
Research & Development tax credit
The R&D tax credit will increase to 35% for all qualifying R&D expenditure. The first-year payment threshold will increase from €75,000 to €87,500. This is the amount up to which a claim can be paid in full in the first year, rather than being paid in instalments over three years. The increase will provide valuable cash flow support to companies undertaking smaller R&D projects or engaging with the credit for the first time.
An administrative simplification measure will be introduced to allow 100% of an R&D employee’s emoluments as qualifying costs where at least 95% of their time is spent on qualifying R&D activities.
An R&D Compass will be published in the coming weeks to set out the future direction of travel for developments in R&D and innovation support.
Capital allowances for energy-efficient equipment and IP
The accelerated capital allowance scheme for energy-efficient equipment provides investors with an upfront 100% wear and tear credit in the year of purchase. The scheme is unchanged in its nature but has been extended to 31 December 2030. The same extension has been applied to the relief for capital allowances on gas vehicles and refuelling equipment.
Participation exemption for dividends
Following the introduction of the participation exemption in 2025, Budget 2026 introduces a number of changes that will be provided for in Finance Bill 2025, including expanding geographic scope.
Interest deductibility
The Minister has advised that a new paper will be published looking at the tax reform of interest deductibility. This is to align Irish and international rules in respect of same. The goal is to simplify the regime.
Audiovisual (film and games credit)
The film tax credit is being enhanced to provide for a 40% rate for productions with a minimum €1 million eligible spend on relevant VFX work, up from 32% last year. There is also an increase on the maximum eligible expenditure to €10 million. These increases are subject to European Commission approval.
The digital games tax credit has been extended for a further six years to the end of 31 December 2031. The credit is also to be enhanced to allow claims regarding post-release content work where the original release had availed of the credit. There is a three-year timeframe from time of original release for expenditure qualifying for the post-release credit.
BIK on vehicles
Category A-D vehicles and vans have been subject to a universal €10,000 reduction of OMV when calculating taxable amounts for BIK. This reduction has been extended for a further three years on a tapered basis as follows:
2026: €10,000
2027: €5,000
2028: €2,500
The lower limit on the highest mileage-based limit for BIK calculation is being permanently reduced to 48,001km from 52,001km, effective 1 January 2026.
A new A1 category is being introduced for calculating BIK on zero-emission employer-provided vehicles with rates to vary from 6% to 15% of the vehicle’s OMV with respect to business mileage in each case.
Stamp duty on acquisition of shares
An exemption from stamp duty has been announced on acquisition of shares in Irish registered companies. The standard 1% rate due on the acquisition of shares will no longer apply where the company is admitted for trading on a regulated market, a multilateral trading facility, or an equivalent third-country market where market capitalisation is below €1 billion. The exemption replaces the previous Enterprise Securities Market exemption.