Finance Bill 2024 introduced into Irish legislation a participation exemption for foreign dividends. This has been long advocated by tax practitioners and is a very welcome introduction into Irish tax legislation. Claire Fitzgerald, tax Director, provides a more detailed analysis of the provisions. Visit: Finance Bill 2024 – Corporation Tax – Participation Exemption for Foreign Distributions
Last year’s finance bill introduced OECD Pillar Two into Irish law which implemented the global minimum effective rate of 15% for corporate groups with an annual global turnover of at least €750 million (in at least two of the preceding four years). This legislation impacts on extremely large corporates.
Finance bill 2024 has implemented a number of provisions off the back of guidance issued and published by the OECD. One of the updates provided further clarification on the calculation of the Domestic Top-up Tax. Other updates related to the Pillar Two GloBE Administrative Guidance which was released on 18th December 2023 and 17th June 2024.
Legislation in relation to outbound payments was initially introduced in Finance Bill 2023. Finance Bill 2024 introduced some amendments to this outbound payments regime including the payment interest, royalties and distributions to associated corporate entities located in tax jurisdictions on the EU list of non-cooperative jurisdictions or no-tax/zero-tax jurisdictions. The legislation provides for the removal of certain exclusions from the obligation to deduct withholding tax on such payments to these no-tax etc. jurisdictions.
This year’s Finance Bill has been updated to ensure the measures introduced last year are operating as initially intended in particular in respect of payments being made to entities that are considered ‘transparent’ for taxation purposes. The 2024 Finance Bill also introduced some technical amendments and removed some unnecessary duplication in certain definitions included previously.
The Bill legislates for an increase in the amount of the first year payment to €75,000 (previously €50,000). This provision is intended to support SMEs making R&D claims by accelerating the amount of the initial refund. This increase is applicable in respect of accounting periods commencing on or after 1 January 2025.
Should you wish to discuss any aspect of Corporation Tax, please contact our team:
Claire Fitzgerald - Tax Director - +353 90 6480600
Ciara Muldoon - Senior Tax Manager - +353 1 6440100
Chloe Kenny - Assistant Tax Manager - +353 90 6480600
Return to Finance Bill 2024 Commentary
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