Ireland’s Budget 2027 introduces a range of tax measures, including reductions in capital gains tax and investment-related tax rates, higher income tax thresholds and credits, increased capital acquisitions tax thresholds, enhanced business and green incentives, and amendments to the Pillar Two global minimum tax rules.

RF Report

Ireland’s Department of Finance published Budget 2027 on 6 October 2026.

The key tax measures are as follows:

Corporation tax administration

Budget 2027 introduces changes to preliminary corporation tax rules to provide greater flexibility and reduce uncertainty. These include:

  • extending the limited top-up mechanism where at least 80% of current-year liability is paid by the final preliminary tax date and the balance is paid within four months;
  • removing the 45% deeming provision relating to underpayment of the second preliminary tax instalment; and
  • increasing the small-company threshold for simplified preliminary tax requirements from EUR 200,000 to EUR 350,000.

Pillar Two – Global Minimum Tax

  • Ireland will amend its Pillar Two legislation following the OECD agreement on the Side-by-Side Package reached in January 2026. The amendments are required within specified timeframes to meet the OECD peer review requirements.
  • The changes provide for the extension of the existing Transitional Country-by-Country Reporting Safe Harbour, as well as the Simplified Effective Tax Rate Safe Harbour, Substance-based Tax Incentive Safe Harbour, Ultimate Parent Entity Safe Harbour, and Side-by-Side Safe Harbour.
  • The legislation will also be amended to reflect additional OECD Administrative Guidance published in May and September 2026 and to update the Pillar Two rules relating to penalties and filing requirements.

Capital taxes

  • The Category A threshold for inheritances from parents to children will increase by EUR 20,000, from EUR 400,000 to EUR 420,000.
  • The threshold for inheritances received by siblings, nieces, nephews, and grandchildren will increase by EUR 4,000, from EUR 40,000 to EUR 44,000.
  • The Category C threshold will increase by 10%.
  • The standard rate of Capital Gains Tax will decrease by 2 percentage points, from 33% to 31%.

Business and investment incentives

  • The accelerated capital allowance for farm safety equipment will be extended for three years to the end of 2029.
  • Amendments to the R&D tax credit regime will seek to simplify and enhance the scheme, including increases to the subcontracting limits and the first-year payment threshold.
  • Section 486C tax relief for start-up companies will be extended to 31 December 2030.

Investment and savings

  • A legislative framework will be introduced for a new Investment Account, while the applicable rates will be reduced from 38% to 35%.

Green and energy tax measures

  • Vehicle Registration Tax relief for electric vehicles, which was due to expire on 31 December 2026, will be extended for two years to the end of 2028.
  • The annual tax exemption for consumers generating electricity at home for their own consumption and selling excess electricity to the grid will increase from EUR 400 to EUR 600.

Financial sector and tobacco taxes

  • The bank levy will be extended for a further year and will therefore apply in 2027.
  • The excise duty on a pack of 20 cigarettes will increase by EUR 1, with a pro-rata increase applying to other tobacco products.
  • A new 7% derelict property tax is introduced to encourage the regeneration of derelict properties.

VAT and agriculture

  • VAT on non-oral respiratory vaccines for livestock is reduced from 23% to 9%.
  • The flat-rate VAT compensation for unregistered farmers increases to 4.8% for 2027.
  • The 50% annual accelerated capital allowances for farm safety equipment are extended to 31 December 2029, with additional eligible equipment.

Personal income tax

  • The standard-rate income tax band cut-off point is being increased by EUR 2,500 for all earners. The threshold will rise from EUR 44,000 to EUR 46,500 for single, widowed or surviving civil partners; from EUR 48,000 to EUR 50,500 for those qualifying for the single person child carer credit; and from EUR 53,000 to EUR 55,500 for married couples or civil partners, whether on one or two incomes.
  • The personal tax credit, employee tax credit, and earned income tax credit will each increase by EUR 125, from EUR 2,000 to EUR 2,125.
  • Home carer tax credit increased: The home carer tax credit will increase by EUR 100, from EUR 1,950 to EUR 2,050.
  • The ceiling for the second Universal Social Charge (USC) band will increase by EUR 1,600, from EUR 28,700 to EUR 30,300.

Housing and rent

  • The maximum level of Help to Buy relief will increase by EUR 5,000, from EUR 30,000 to EUR 35,000.
  • The relief will be extended to certain garden, auxiliary, and modular dwellings installed after 27 July 2026. The qualifying income threshold will also increase to EUR 16,000.
  • The Rent Tax Credit will increase by EUR 150 to EUR 1,150 for a single claimant and by EUR 300 to EUR 2,300 for a couple.

Childcare and family support

  • Tax relief available under the childcare services scheme will increase from EUR 15,000 to EUR 20,000, with the cap on the number of children who can be minded removed.