Paul Donnelly (Dublin West, Sinn Fein)
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607. To ask the Minister for Finance if he or his predecessor have spoken formally with their Japanese counterpart since January 2024. [20913/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Ireland enjoys a deep and wide-ranging bilateral relationship with Japan, owing from cultural and people-to-people ties, our economic and trade relationship, and our cooperation on global affairs across an array of fora and channels including the G20 and the OECD.

Since my re-appointment as Minister for Finance in January of this year, I have not yet had the opportunity for direct formal engagement with Japan’s current Finance Minister, Mr. Katsunobo Kato.

My predecessor Minister Chambers, exchanged written correspondence with Minister Kato and his predecessor Minister Suzuki.

Cian O'Callaghan (Dublin Bay North, Social Democrats)
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608. To ask the Minister for Finance for an update on his Department’s plans to implement the recommendations made in chapter 7 of the Commission on Taxation and Welfare report; and if he will make a statement on the matter. [21037/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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‘Foundations for the Future’, the Report of the Commission on Taxation and Welfare, was published in September 2022. The report is wide-ranging and contains 116 recommendations relating to the future of Ireland’s taxation and welfare systems.

In its terms of reference, the Commission was asked to independently consider how best the taxation and welfare systems can support economic activity and promote increased employment and prosperity while ensuring that there are sufficient resources available to meet the costs of the public services and supports in the medium and longer term.

The chapter the Deputy is referring to provides a range of recommendations in relation to Capital Gains Tax (‘CGT’) and Capital Acquisitions Tax (‘CAT’). A number of those recommendations have been enacted in legislation and are set out below.

The Commission recommended that the Revised Entrepreneurial Relief (RER) be extended to angel investors, subject to appropriate limits and conditionality. The broad policy rationale was that equity investments by angel investors could generate a positive impact on SME productivity and on the general business population through potential spill-over effects.

Finance Act 2024 provided for the new targeted CGT ‘angel investor relief’ for investment in innovative start-ups and SMEs. The relief which commenced on 1 March 2025, is aimed at assisting innovative start-ups (as defined and certified accordingly) and SMEs to attract investment. As such this relief, in line with the Commission recommendation and policy analysis, is much more targeted than the RER, with a strategic focus on promoting investment in innovative SMEs. If certified ‘innovative enterprises’ do not feel confident in securing, or indeed do not have the need to secure, follow-on investment from outside investors under this scheme, they may still consider such certification to be beneficial, in and of itself, from a branding or marketing perspective.

The Commission also recommended that a lifetime limit be introduced on retirement relief on the disposal of businesses and farms to the children of individuals who are disposing of such assets. As there was previously no lifetime limit in place to those receiving retirement relief from those assets disposed of by parents aged 55 to 65 to their children, the Commission maintained that a cap should be introduced for the purposes of promoting fiscal sustainability and equity.

Finance (No. 2) Act 2023 introduced such a cap; for disposals to a child made on or after 1 January 2025, a lifetime limit of €10 million generally applies to the market value of the qualifying assets to which retirement relief applies. A €3 million cap applies to disposals of qualifying assets by individuals aged 70 years and over.

Further to this, Finance Act 2024 provided that CGT liability which arises to an individual on the transfer of qualifying assets to a child on or after 1 January 2025, the value of which exceeds the €10 million lifetime limit, may be deferred by the individual making the transfer. In circumstances where an individual has chosen to defer the CGT liability, the relevant qualifying assets are subject to a 12-year retention period.

The Commission’s recommendation that the role of the foster child within the family unit should be recognised was also legislated for, with Finance (No. 2) Act providing that foster children can avail of the group B threshold based on their relationship to their foster parents.

Further recommendations made by the Commission in this chapter are under review by my officials on an ongoing basis. The Commission clearly set out in its report that the recommendations are not intended to be implemented all at once, but rather provide a clear direction of travel for future Governments around how the sustainability of the taxation and welfare systems may be improved in a fair and equitable manner.