Ireland Finance Bill advances R&D, interest and VAT reforms

R&D and corporate reliefs

Section 25 would amend sections 766, 766C and 766D of the Taxes Consolidation Act 1997. The limits for R&D outsourced to universities and unconnected parties would each become the greater of 20% of the company’s in-house R&D expenditure or €200,000. A qualifying company could treat 105% of qualifying R&D emoluments as expenditure, subject to conditions, while the first refundable-credit instalment would rise from €87,500 to €105,000.^[1][2]

Section 30 extends section 486C start-up relief to new trades beginning through 31 December 2030. Section 32 extends the Knowledge Development Box to accounting periods beginning by 1 January 2032 and creates a one-period, irrevocable opt-out for existing claimant companies. Existing qualifying assets would leave the regime permanently after that election, although later-created assets could form a new specified trade.^[1][2]

Interest and payment rules

Sections 33 and 34 would simplify the section 247 interest-relief conditions and related section 249 recovery-of-capital rules, and give companies two years after the relevant accounting period to make specified interest-limitation elections. For accounting periods beginning from 1 January 2027, section 74 raises the small-company preliminary-tax threshold from €200,000 to €350,000. A company that pays at least 80% by the normal deadline could top up to 100% four months after period end and be treated as meeting its preliminary-tax obligation.^[1][2]

Cross-border and digital compliance

Section 31 updates the jurisdiction list used by Ireland’s defensive rules for controlled foreign companies, the foreign-distribution participation exemption and withholding taxes on outbound payments. Section 51 would introduce structured VAT invoicing and digital reporting from 1 November 2028. Section 73 would add the Liechtenstein treaty and Sweden protocol to Schedule 24A, with force of law dependent on enactment.^[1][2]

The bill remains proposed legislation, so companies should distinguish its prospective rules from measures already effective under Budget Day resolutions. Section 72 separately contains Ireland’s Pillar Two amendments; this brief does not duplicate that minimum-tax work. The practical task is to map each non-Pillar-Two measure to its stated commencement condition and retain the existing Budget-stage analysis as context rather than treating the bill as enacted law.^[1][2][3]