Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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164. To ask the Minister for Finance if he is aware that workers on average pay a greater proportion of their wage in income related taxes than businesses pay in corporate taxes; and his plans to ensure that businesses pay at least the same proportion of their profits in taxes as the ordinary worker. [68648/26]

Simon Harris (Wicklow, Fine Gael)
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The Deputy is drawing a comparison between the Corporation Tax and Income Tax regimes which, as he will be aware, are designed to tax different entities and circumstances.

Corporation Tax is paid directly by the company on its profits, and the activities of the company also support the payment of income taxes in the form of PAYE income tax and social insurance on employees’ wages and the taxation of dividends paid to shareholders from net profits.

Ireland’s Corporation Tax regime has been built on certainty and predictability, and the 12.5 per cent headline rate on trading income has been a cornerstone of that regime for over 20 years. This stability has enabled companies to plan long-term investments in Ireland, generating employment and increasing economic activity.

Ireland’s Corporation Tax regime has been undergoing significant reform in recent years, as part of a global process of Corporation Tax reform. This has included the transposition of the Anti-Tax Avoidance Directives and, in 2023, the implementation of the Pillar Two global minimum effective tax rate of 15 per cent for large corporate groups with annual global revenues in excess of €750m.

While it is possible that imposing further increased taxation on profitable companies could lead to theoretical gains, it could also potentially lead to lower levels of economic activity and/or to companies passing the additional tax burden onto their staff, customers, suppliers and/or investors.

I am conscious of the average tax rates paid by individuals, and details of effective tax rates for a number of different household types across a range of incomes are published each year in the Budget Tax Policy Changes publication. As the Deputy will be aware, the ‘Programme for Government 2025: Securing Ireland’s Future’, contains specific undertakings with regard to personal taxation, it commits to “implementing progressive changes in taxation if the economy remains strong, including indexing credits and bands to prevent an increase in the real burden of Income Tax.”

Barry Ward (Dún Laoghaire, Fine Gael)
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165. To ask the Minister for Finance the position regarding a review of inheritance tax parameters; and if the existing relationship category thresholds can be reviewed. [68251/26]

Simon Harris (Wicklow, Fine Gael)
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Capital Acquisitions Tax (CAT) is a tax which applies to both gifts and inheritances and is charged at a rate of 33%. For CAT purposes, the relationship between the person giving a gift or inheritance and the person who receives it determines the maximum amount, known as the “Group threshold”, below which CAT does not arise. It is important to say that the group thresholds were most recently increased in Budget 2025 as follows:

The Group A threshold increased to €400,000 from €335,000. This threshold generally applies where the beneficiary is a child of the disponer. This includes adopted children, stepchildren and some foster children. Parents may also fall within this threshold where they take an inheritance from a child.

The Group B threshold increased to €40,000 from €32,500. This threshold applies where the beneficiary is a brother, sister, niece, nephew, or lineal ancestor or lineal descendant of the disponer. Following recent changes made to Capital Acquisitions Tax legislation, the Group B threshold also applies to persons who receive gifts and inheritances from the wider family of their foster parents, for example, from their foster siblings, uncles, aunts and grandparents.

The Group C threshold increased to €20,000 from €16,250, with this threshold applying in all other cases.

My officials examined CAT as part of both last years and this year’s annual Tax Strategy Group exercise. The resultant papers outlined the tax policy considerations for the Government and the options available to it in forming a Budget. The Tax Strategy Group papers relating to CAT also examined a number of cost modelling exercises, including proposals to amend the Group B threshold parameters. They were published in advance of the Budget and are the best means of considering issues such as inheritance tax in an analytical and transparent way. As demonstrated by that exercise, there is a significant associated cost with further changes to the group thresholds. The Tax Strategy Group is not a decision-making body and the papers produced by my Department are simply a list of options and issues to be considered in the Budgetary process.

As with all taxation matters, CAT is kept under review. As the Deputy will be aware, 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.