Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

I will introduce a financial resolution on this matter later this evening.

MORTGAGE INTEREST RELIEF

Mortgage interest tax relief was announced in last year’s budget and provided relief for mortgage holders who experienced increased interest rates in 2023 over 2022. In light of the impact high interest rates continue to have on households, I am extending this relief for one further year. This extension means that the relief will also be made available to assist mortgage holders in respect of the increase in interest paid in 2024 over 2022.

MEASURES TO SUPPORT BUSINESSES

Businesses both large and small are the lifeblood of our economy, and this Government is committed to supporting businesses so they can continue to grow, innovate and create employment.

REDUCING COMPLEXITY AND BOOSTING IRELAND'S ATTRACTIVENESS

International developments and commitments have seen significant complexity added to the corporation tax code in recent years and in budget 2025, I am pleased to take an important step towards reducing this burden through the introduction of a participation exemption for foreign dividends. This measure, which will come into effect from 1 January next, will provide an alternative, much simplified mechanism for double tax relief for multinational businesses. Work will continue in the coming year on participation exemptions, including further consideration of geographic scope and of a foreign branch exemption.

It is critical that we continue to actively work on maintaining Ireland’s attractiveness to businesses. The review of the tax treatment of interest, in respect of which a public consultation was launched last Friday, will seek to further reduce complexity in our tax code.

We must also support innovative businesses as they evolve to meet the challenges and seize the opportunities, of an increasingly digitalised world. This will be a focus of my Department’s review of the research and development tax credit, which will be undertaken over the coming year.

In the interim, to demonstrate this Government’s continuing commitment to innovative enterprises, I am providing for an increase in the first year payment threshold in the R and D tax credit from €50,000 to €75,000 to provide further cash flow support to those companies undertaking smaller R and D projects or engaging with the credit for the first time.

SUPPORTING SMALL AND MEDIUM ENTERPRISES

Startup and scaling businesses are the backbone of this country, providing significant employment across the country, with the potential to become the market leaders of tomorrow. It has been a long-standing commitment of this Government to support and promote these businesses, including by helping them to attract funding through incentives such as the employment investment incentive, the startup relief for entrepreneurs and the startup capital incentive.

My Department has recently completed a review of these schemes, which I have published today, and I am pleased to announce that I am extending all three schemes for a further two years to the end of 2026. I am also doubling the amount an investor can claim relief on under the employment investment incentive from €500,000 up to €1 million and increasing the relief available under the startup relief for entrepreneurs from €700,000 to €980,000.

Linked to this, and in recognition of the Government’s commitment to cultivating a thriving business angel investment ecosystem in Ireland, I am amending the capital gains tax relief targeted at investors in innovative startups to provide for an increased lifetime limit on gains to which the relief applies from €3 million to €10 million. This relief, which was announced last year, will commence shortly.

In addition, to support new startup companies, I am enhancing the section 486C small company startup relief from corporation tax by introducing a new method for companies to qualify for the relief by reference to class S PRSI, thereby extending the scope of the relief to small owner-managed startup companies.

For businesses scaling up, I am introducing a new relief for expenses incurred in connection with a first listing on an Irish or European stock exchange, subject to a cap of €1 million. To further support Irish businesses to grow and scale, in the coming year my Department will, subject to state aid considerations, introduce a stamp duty exemption. This measure would enable Irish SMEs to access equity via financial trading platforms designed to support their funding needs.

VAT REGISTRATION THRESHOLD

As a further measure to support small business, I have decided to raise the VAT registration thresholds that apply for the supply of goods and services, which are currently €80,000 and €40,000, respectively, to €85,000 and €42,500, respectively.

RETIREMENT RELIEF

Retirement relief supports the intergenerational transfer of businesses and farms and works to ensure their smooth transition so that they continue to play their important role in the Irish economy. Two changes will come into effect from 1 January 2025. I will retain the extension of the upper age limit for the relief from 65 years until the age of 70 to reflect current work practices. I am also providing that where there are disposals by the child or children above €10 million within 12 years of receiving the assets, a clawback of the relief will apply. Therefore, where the child or children retain the assets for more than 12 years, the CGT will be fully abated. This will support the growth and scaling of the family-owned businesses that are so important to our communities across our country.

SECTION 481 RELIEF

Turning now to the audiovisual sector, it is a source of great pride for Ireland that we have an international reputation as a centre of excellence for screen production, with a vibrant creative culture. This Government has shown significant ambition in recent budgets in supporting the sector to capitalise on its recent successes.

In order to maintain momentum and expand the breadth of the Irish industry, I am today announcing the introduction of a new tax credit for unscripted production, subject to European Commission approval. This credit will be available at a rate of 20% on qualifying expenditure of up to €15 million and, similar to the other audiovisual reliefs, projects will be required to pass a cultural test.

In addition, in response to specific challenges being faced by smaller feature film projects in bringing their stories to the screen, I am introducing a new 8% uplift under the section 481 film tax credit, again subject to state aid approval. This will apply to feature film productions with a maximum qualifying expenditure of €20 million. Further details of these two new supports will be set out in the Finance Bill next week.

I am also conscious of the importance of the visual effects sector within our wider audiovisual offering in Ireland. I have instructed my officials to monitor trends in the sector internationally over the coming year with a view to providing options for introducing a sector-specific measure as part of budget 2026, if appropriate.

Finally, recognising the important role that share-based remuneration plays in rewarding and retaining employees, which in turn helps businesses to thrive and grow, my Department commissioned an independent review of share-based remuneration this year. The report arising from that review has been published today and contains a number of recommendations, which I will consider in due course.

FARMING

Agriculture and the agrifood sector are of vital importance in our economy. This sector is embedded in our communities and wider society. Irish farmers play an important role in providing high-quality food domestically and for export and are highly regarded for quality produce and farming methods.

EXTENSION OF AGRICULTURAL STOCK RELIEFS

A number of important agricultural tax reliefs are due to expire at the end of this year. I can confirm the extension of the following reliefs to the end of 2027: general stock relief, stock relief for young trained farmers and stock relief for registered farm partnerships. I am also broadening the scope of accelerated capital allowances for farm safety equipment by adding further qualifying farm safety equipment types that can benefit from the relief.

INCOME STABILITY (FARMING/DAIRY)

I am aware that there can be income instability in the farming sector in general and the dairy sector more specifically. I am keen to advance an income volatility measure to support the farming sector for consideration in advance of next year’s budget. This requires detailed consideration of complex issues of policy around how this would operate in the context of financial regulation, governance and legal structures. My officials will work with the Department of Agriculture, Food and the Marine in progressing proposals for consideration.

AGRICULTURAL STAMP DUTY RELIEFS

How farmers organise their farm business has been changing in recent years, and to reflect modern developments in the agriculture sector, I am amending both the young trained farmer stamp duty relief and the stamp duty relief which applies to farmers who lease land. The relief for young trained farmers will be revised so that it will be available where it is claimed by an individual farmer who carries on the farm business through a company. The leasing relief will be amended to also encompass farmers who have chosen to incorporate their business.

AGRICULTURAL RELIEF

Agricultural relief promotes the transfer of farms from one generation to the next and is an important measure to allow our young people to pursue their lives on the family farm.

In recent years, agricultural land has increased in value above inflation and it is difficult for genuine farmers to purchase the land they need for farming. To address this and concerns that agricultural relief is being used as part of tax planning strategies by wealthy individuals, I am extending the six-year active test to the person who provides the gift or inheritance. This measure supports current farmers and the next generation.

FARMERS FLAT RATE COMPENSATION

The House will be aware that the flat-rate scheme compensates unregistered farmers on an overall basis for VAT incurred on their farming inputs. Based on macroeconomic data received from the CSO and the Revenue Commissioners for the period 2022 to 2024, it is proposed that this rate be increased from the current 4.8% to 5.1% from 1 January 2025.

RESIDENTIAL ZONED LAND TAX (RZLT)

The residential zoned land tax is an important lever to activate the building of houses on appropriate sites which have been identified by local authorities across the country. It is important that the measure does not unduly impact landowners who carry out genuine economic activity on their land. Therefore, I am providing an opportunity for these landowners to avail of an exemption in 2025 if they seek to have their land rezoned to reflect the activity they carry out on their land. The Minister for Housing, Local Government and Heritage will issue guidelines to local authorities indicating that they should consider and accommodate rezoning requests where landowners seek to continue undertaking existing economic activity.

SPORTS AND PHILANTHROPY

SPORT

Making good on the commitment by my predecessor, Michael McGrath, in last year’s budget speech, I will be bringing forward measures to support national sporting bodies in planning and investing for the future.

Changes will be made to the tax exemptions that apply to those bodies to facilitate long-term investments for the purposes of future capital projects and sport equipment needs to support Ireland’s high-performance athletes and wider sports participation.

Furthermore, I will be bringing measures forward in the Finance Bill to allow those making donations to sports bodies for capital projects and the other objectives greater flexibility in how those donations will be treated for income tax purposes. It is my intention that both PAYE and self-assessed donors will be able to choose for the income tax relief on donations under the relevant tax provisions to go either to themselves or to the sporting body itself. I believe that this will provide an additional incentive for taxpayers across the country to provide direct support to their local and national clubs and bodies.

I strongly believe that physical activity is an essential part of supporting the health and mental well-being of all our citizens, young and old. As such, I believe there is merit in examining how the tax system can help to achieve greater participation in sport and fitness activities, including through gyms, for example. Over the course of next year, my officials will continue this work with the view of developing proposals for consideration in advance of next year's budget.

CHARITIES/PHILANTHROPY

The five-year national philanthropy policy, launched last December, is key to fostering a new approach to giving. As an initial step in supporting the policy, I will remove barriers to charities having access to tax benefits under the charitable donations scheme. Charities will no longer have to have been established for at least two years to access the scheme, and will have a longer timeframe from the date of a donation to use the funds raised under the scheme for the important work they do.

HEALTH

TOBACCO

I am increasing excise duty on a packet of 20 cigarettes by €1, with a pro rataincrease on other tobacco products. This will bring the price of cigarettes in the most popular price category to €18.05 and supports public health policy to reduce smoking levels in Irish society. A financial resolution will be introduced tonight to enact this measure.

E-CIGARETTES (E-LIQUID EXCISE)

I am introducing a domestic tax on e-cigarettes on public health grounds as there has been a significant rise in their use. The tax will apply to all e-liquids at a rate of 50 cent per ml of e-liquid. A typical disposable vape contains 2 ml of e-liquid, and costs in the region of €8. This new tax will bring the price of such a product to €9.23, including VAT. Due to the operational and administrative challenges associated with this measure, it will not commence until the middle of next year and therefore will be subject to a commencement order.

STAMP DUTY

BULK PURCHASE

I share the concerns of aspiring homeowners that the bulk acquisition of houses impacts on the number of houses made available for purchase. To discourage significant purchases of houses by investment funds, I am increasing the higher rate of stamp duty on bulk acquisitions of houses from 10% to 15%-----

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