Cormac Devlin (Dún Laoghaire, Fianna Fail)
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302. To ask the Minister for Finance if he will consider extending the dividend withholding tax exemption to investment limited partnerships (ILPs) in order that ILPs are treated on a par with other Irish regulated funds; if he will provide an assessment of the Exchequer impact; the anti-avoidance guardrails that would apply; the expected effect on Ireland’s competitiveness in private equity, private credit and infrastructure investment, in the context of mobilising patient capital for housing, SMEs and renewables; and if he will make a statement on the matter. [48074/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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An Investment Limited Partnerships (ILP) is a partnership agreement between one or more general partners and one or more limited partners under the ILP 2020 Act. ILPs are one of the five legal entity options for Irish domiciled funds. ILPs are commonly used to invest in private market assets such as equity and debt issued by privately owned companies.

ILPs authorised on or after 13 February 2013 are treated as tax transparent, and the income and gains are treated as the income and gains of each unit holder directly. There is no Corporation/Income/Capital gains tax charged at the level of the ILP on the basis it is a tax transparent entity. ILPs are also exempt from DIRT.

Dividend Withholding Tax applies at the level of the ILP, as there is no Dividend Withholding Tax exemption available for ILPs under the current legislation in respect of distributions paid to an ILP, even if the ultimate partners would be exempt in their own right.

The third recommendation of the Funds Review report recommended that a package of measures be taken forward by the Department of Finance to improve the attractiveness of the ILP including a review of the interaction of DWT and ILPs.

My officials have carried out considerable work on this recommendation in recent months. They are engaging with industry stakeholders and working hard to find ways to progress this matter. In relation to any plans to amend the relevant legislation as part of Budget 2025, the Deputy will be aware that it is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.

Cormac Devlin (Dún Laoghaire, Fianna Fail)
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303. To ask the Minister for Finance if he will expedite amendments to broaden the anti-reverse hybrid exemption in order that private asset funds can hold more than 10% in a single issuer while retaining tax-transparent status; to outline the compatibility of such a change with anti-tax-avoidance directives; the safeguards proposed, the international comparators and the timeframe for legislative change; and if he will make a statement on the matter. [48075/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The purpose of anti-hybrid and anti-reverse-hybrid rules is to prevent arrangements that exploit the differences in the tax treatment of an instrument or entity arising from the way in which that instrument or entity is characterised under the tax laws of two or more territories to generate a tax advantage or a mismatch outcome.

These rules were implemented in Ireland as part of Ireland's transposition of the Anti-Tax Avoidance Directives.

I am aware of a stakeholder submission seeking consideration of this aspect of the legislation. As with all pre-Budget submissions this proposal and the objective of ensuring Ireland's continuing competitiveness will be considered in light also of Ireland's obligations in implementing the Directive to achieve the policy objective of addressing reverse hybrid mismatches, as well as ensuring the robustness of the legislation domestically.

Cormac Devlin (Dún Laoghaire, Fianna Fail)
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304. To ask the Minister for Finance if he will examine expanding the dividend participation exemption to dividends from companies beyond EU or treaty-country jurisdictions, excluding zero-tax territories and those on the EU non-cooperative list; the costs, benefits and risk mitigations, and the impact on Ireland’s attractiveness as a holding company location for private asset managers; the options for inclusion in the Finance Bill; and if he will make a statement on the matter. [48076/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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A Participation Exemption for Foreign Dividends was introduced in Finance Act 2024 to provide an optional alternative simplified method of double tax relief in addition to the existing double taxation relief provisions. The exemption for qualifying dividends reduces the complexity and administrative burden of the current system of double tax relief.

The objective of the participation exemption is to ensure Ireland’s continued attractiveness to foreign direct investment by providing flexibility and administrative simplicity to taxpayers when claiming double tax relief. This measure was developed and introduced following extensive public consultation processes and stakeholder engagement.

Currently, the participation exemption is available for qualifying distributions received from EU/EEA countries and countries with which Ireland has double tax agreement. The purpose of the geographic limitation to the participation exemption for foreign dividends is to recognise that an exemption provision must be robust and protect against double non-taxation while also facilitating double tax relief.

A commitment was given in last year's Budget speech to give further consideration to the geographic scope of the exemption in 2025. My officials have considered all aspects of the participation exemption rules throughout 2025, including in relation to geographic scope, and are developing options for my consideration.

I will consider these options and make decisions in due course to ensure that this aspect of the tax system delivers simplification of double tax relief while maintaining the safeguards necessary to ensure that the rules remain robust.