Finance Bill 2025: Implications for Ireland’s Financial Services Sector

The Bill provides further detail on how these tax measures will be implemented, along with further administrative and technical measures not covered in the Minister’s Budget Day speech. The tax measures contained in the Bill will take effect from 1 January 2026.

Below are some of the key measures contained in the Bill which are relevant to companies operating in the Irish Financial Services sector. 

Direct Tax

Treatment of Foreign Bodies Corporate

Section 35 of the Bill inserts a new section 1009A TCA 1997, which treats a foreign body corporate which is substantially similar to an Irish partnership as a partnership as a partnership for Irish tax purposes.

Investment Funds

• Section 36 of the Bill amends the exit tax rate for investment undertakings and equivalent offshore funds from 41% to 38% as announced by Minister Donoghue in the Budget.
• Section 38 of the Bill introduces an exemption from Dividend Withholding Tax for Investment Limited Partnerships and equivalent EEA-authorised partnerships that own 51% or more of the dividend-paying company, subject to certain conditions.

Participation Exemption

Section 45 of the Bill expands the territorial scope of the Participation Exemption for foreign dividends to include dividends from jurisdictions with which Ireland does not have a double taxation treaty, provided that they generally impose withholding tax on distributions.

Interest paid on loans to connected persons used to acquire assets from connected persons

Section 47 of the Bill amends section 840A TCA 1997, which denies a deduction for interest in circumstances where a loan from a connected person is used to acquire assets from a connected person. The amendment will allow a deduction in certain circumstances, provided that the transaction is for bona fide commercial purposes.

BEPS: Pillar II

• Section 92 of the Bill amends BEPS: Pillar II provisions to take account of the latest OECD Guidance, DAC 9 and AEOI provisions relating to BEPS: Pillar II.
• Section 93 of the Bill confirms that the successor company in a merger will inherit the BEPS: Pillar II obligations of the transferor company.

Value Added Tax

Section 74 of the Bill introduces a VAT exemption for financial services related to managing auto-enrolment pension systems.

Stamp Duties

Market-cap exemption

• Section 79 of the Bill legislates for the market-cap exemption for Irish shares traded on a regulated market.
• It also repeals the previous exemption available for shares listed on the Euronext Growth market operated by the Irish Stock Exchange.

Bank Levy

Section 80 of the Bill extends the Bank Levy on AIB, EBS, PTSB and Bank of Ireland to 2026.

Health Insurance Policies

Section 81 of the Bill amends Section 125A to provide for a partial refund of Stamp Duty on Health Insurance Policies where the policy is cancelled during the year. This amendment is due to take effect from 1 April 2027.

Tax Reporting

Country by Country Reporting

• Section 48 of the Bill amends the CbCR reporting requirements to confirm that the legislation should be interpreted in accordance with OECD Guidance.
• It also legislates for the approach taken by Revenue in relation to accounting periods of less than 12 months, certain group restructuring and extraordinary income and gains.

Crypto-Asset Reporting

• Section 89 of the Bill transposes DAC 8, the Crypto-Asset Reporting Framework into Irish Law.
• Section 91 of the Bill updates the CRS reporting framework to account for DAC 8.

Timetable of the Bill

The Bill will now pass through the Houses of the Oireachtas before being signed into law by the President before the Christmas break.

If you would like to discuss any of the proposed changes in further detail, please contact a member of our tax team.