Employee Share Incentive Schemes

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Employee Share Incentive Schemes

Employee share incentive schemes can serve as an effective alternative to bonuses. They not only offer tax savings for employees, but also promote greater participation and loyalty within the company. There is also a tax saving of employer PRSI for the employer where remuneration is by way of equity participation when compared to cash or other benefits.

Depending on the type of scheme, employees might need to hold onto the shares for several years before they can enjoy the tax benefits.

One of the key considerations when implementing a share plan is the valuation of the shares. Accurate valuation from the outset is crucial to ensure the proper taxation of the awards, such as growth shares and restricted shares.

In this article we consider the following type of employee share incentive schemes:

  1. Share option schemes
  2. Restricted Stock Units (RSUs)
  3. ‘KEEP’ share option schemes
  4. Growth/Flowering Shares
  5. Restricted Shares

1. Share Options

This is an option granted by a company to its employees to subscribe for shares at a pre-determined price at some point in the future.  The option must be exercised in order for the employee to get beneficial ownership of the share. Prior to exercise, the employee does not have any rights relating to the shares. The employee pays taxes on any profit made when they eventually exercise the shares. There’s a deadline to exercise this option (usually 7 years) to avoid tax issues on granting. The burden for withholding tax is now placed on the employer for all options exercised on or after the 1st of January 2024. CGT is chargeable on any subsequent disposal of the shares.

2. Restricted Stock Units (RSU’s)

This scheme awards free shares to employees, and usually vest after a set period (can be time-based or performance-based). Employees are taxed on the market value of the shares at vesting, similar to a salary, and the employer withholds the tax. There are no tax implications at the grant. Conditions outlined in a plan document must be met before shares are issued.

3. Key Employee Engagement Programme (KEEP)

This is a tax advantageous share option scheme introduced specifically for certain qualifying SME companies for their employee or directors. Employees do not pay taxes when they exercise the option to buy shares. Instead, they pay capital gains tax (33%) when they eventually sell the shares. There are several conditions to be satisfied which can make KEEP challenging, including that options must be granted at market value. However, due to the tax benefits, KEEP is worth considering when deciding on what plan to utilise.

4. Growth/Flowering Shares

Growth shares are a special class of ordinary shares that generally have a low or nil value until a certain target or hurdle is reached by the business. The growth share is subject to income tax, USC and PRSI on award and must be valued for tax purposes. This type of share award can be attractive where the owners wish to share in future growth in the value of the company. CGT will be payable on any growth in value.

5. Restricted Shares

 Restricted shares are subject to income tax, USC and PRSI at the date of award. There is an abatement on the taxable value available under Section 128D which reduces the taxable value by 10% per year of restriction up to a maximum of 60%. There is a claw back of income tax if restrictions lifted or varied before the end of the restricted period. CGT will be payable on any growth in value.

If you are considering implementing an employee share incentive scheme and require advice on choosing the right plan to implement, please do not hesitate to contact us.

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Share Scheme Reporting Obligations

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Share Scheme Reporting ObligationsThere are several annual reporting obligations for employers and trustees who operate share schemes for their employees which are due by 31 March following year end.

The return to be filed is dependent on the type of share award or share option involved.

Form Name Plan Type
ESA                                                          Restricted Share Units (RSUs) – Share & Cash Settled

Discounted/Free/Matching Shares

Employee Share Purchase Plans (ESPP)

Restricted Shares

Convertible Securities

Forfeitable Shares

Phantom Shares

Stock Appreciation Rights

Growth/Hurdle/Flowering Shares

Other shares
RSS1 Share options and other rights
KEEP1 KEEP share options
ESS1 Approved Profit Sharing (APSS) Schemes
SRSO1 Save As You Earn (SAYE) schemes
ESOT1 Employee Share Ownership Trust (ESOT) schemes

Revenue are actively reviewing Share Scheme Reporting Forms and raising enquiries where there are discrepancies between the Forms and information reported via PAYE and/or employees personal tax reporting.

It is therefore more important than ever that employer Share Scheme Reporting is completed accurately and on a timely basis.

Deadline

The annual return must be filed on or before 31 March.

Contact us

If you require assistance with the preparation and submission of any of these returns, please contact us.

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Everything you need to know about Pillar Two

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Everything you need to know about Pillar Two

The Irish Revenue have now implemented the Pillar Two tax rules which may have consequences for Irish companies who are part of a multinational group.

To determine whether your company may be liable to file additional tax returns and pay a top up tax, we have prepared FAQs to provide you with the key characteristics of the Pillar Two Tax rules.

Who do the Pillar Two Rules apply to?

Multinational groups with an annual revenue exceeding €750 million. The test is based on the two of the four Fiscal Years immediately preceding the tested Fiscal Year.

What do these groups have to do?

The pillar 2 rules require these groups to pay minimum corporation tax of 15% on income earned in each jurisdiction in which they operate

If the tax rate is lower than 15% in a jurisdiction what must they do?

If the effective tax rate in a jurisdiction is below 15%, the new top-up tax may be levied.

If a top up tax is required, it is collected in one of three ways;

  1. Income Inclusion Rule:
  2. Qualified Domestic Top-up Tax:
  3. Undertaxed Profit Rule

These options can be discussed in detail if the Pillar Two rules apply to your group.

When do these rules come into effect?

Ireland has introduced the IIR and QDTT with effect for accounting periods beginning on 1 January 2024.

The UTPR will take effect for accounting periods commencing from 1 January 2025.

When should I register for the Pillar Two Taxes?

Within 12 months of the end of the first fiscal year in which the entity is subject to tax.

For example, a company who will be liable to the IIR and QDTT for 2024, must be registered for those taxes by 31 December 2025.

If they are then liable to UTPR, they must register by 31 December 2026.

What reporting obligations does a company have if they are within scope of the Pillar Two Rules?

They must submit a top up tax information return to Revenue within 15 months of their year-end. For the first year being within scope, this deadline is extended to 18 months.

E.g. a company with a December year end would be required to file a return by 30th June 2026 in their first year, and 30th March thereafter.

Are there any exemptions available from the Pillar Two Rules?

There are safe harbours available that we can discuss if the Pillar Two rules apply to your group.

Please feel free to contact us to discuss these new tax rules if you think they may apply to you.

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Joining Forces with Childline by ISPCC: Our Charity Partner for 2025-2026

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Joining Forces with Childline by ISPCC: Our Charity Partner for 2025-2026

We are delighted to announce that Childline by ISPCC has been selected by our employees as our Charity Partner for 2025 and 2026.

ISPCC is dedicated to enhancing the lives of children and young people across Ireland. They achieve this by providing a suite of relevant services under the Childline brand. Childline has expanded its reach by offering a variety of online support options alongside its well-known phone line. Now, Childline provides a 24/7 listening service via phone and webchat, making it more accessible than ever.

Focused on building resilience and enhancing coping skills, the charity’s child-centered services empower children and young people to better navigate life’s challenges and unlock their full potential. They are also dedicated to advocating for meaningful change to improve children’s lives today and create lasting benefits for future generations.

Commenting on the announcement, James O’Connor, Managing Partner, said:

“We are proud to support Childline by ISPCC’s important work in ensuring that every child and young person in Ireland has access to the care, support, and guidance they need. Giving back to the community is at the core of our values, and this partnership gives us a unique opportunity to make a meaningful difference in the lives of children across the country. We’re excited to collaborate with this wonderful charity to help create a brighter, safer future for the next generation.”

John Church, CEO at ISPCC said:

“Our mission at ISPCC is to protect childhood and to ensure that every child in Ireland is given the opportunity to thrive. We are incredibly grateful to everyone at Crowleys DFK for choosing us as their official charity partner for 2025 and 2026 and look forward to working together to raise funds to help make children all over Ireland lead better, happier and safer lives.”

In the coming weeks, Crowleys DFK will work closely with Childline by ISPCC to develop a fundraising calendar for this two-year partnership.

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Celebrating Two Years of Partnership for Mental Health: Crowleys DFK and Aware

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Celebrating Two Years of Partnership for Mental Health - Crowleys DFK and AwareCrowleys DFK is delighted to celebrate the completion of a successful two-year charity partnership with Aware, the national organisation providing free support, education and information services to people impacted by anxiety, depression, bipolar disorder and related mood conditions. Since the beginning of this collaboration, we have been driven by a shared mission to enhance mental wellbeing and reduce stigma within our communities.

“Supporting Aware has shown me that small acts of kindness can ripple out and create lasting change. It resonates deeply with me because it’s not just about giving—it’s about standing together, breaking the silence, and showing that no one must face their struggles alone. Understanding and tackling mental health plays a large part in my life and in the lives of many today. I have enjoyed taking part in the various activities and fundraising events Crowleys DFK have organised over the past 2 years. It has not only allowed me to contribute to a cause I deeply believe in but has also strengthened my connection to a community that shares a commitment to improving mental health.”

Paul Mulcahy | HR Generalist | Human Resources

The partnership began with an ambitious vision: to combine the resources, reach, and commitment of Crowleys DFK with the expertise and dedicated services of Aware. Over two years, our collaboration has yielded inspiring results.

Fundraising Milestones

With the generous contributions of our employees, we proudly raised over €40,000 to support Aware. Our team actively participated in numerous fundraising events organised by Aware, such as the Liffey Loop, Resilience Lunch, and Corporate Golf Day. Additionally, many of our employees generously signed up for the Donate As You Earn (payroll giving) programme. They also took part in a range of internal initiatives, including the Crowleys DFK Hike for Aware, Crowleys DFK May Step Challenge and various raffles.

“Supporting Aware throughout the past two years has been a wonderful experience. Aware has always been an organisation which has been close to my heart over the years, and it was delightful to support Aware through various in office initiatives and a brilliant day out to the Golf outing in Milltown Golf Club. This was a great opportunity to play golf alongside Crowleys DFK staff and meet the wonderful people supporting Aware every year from all over Ireland. It is something I would love to and will support into the future.

I would also like to make a special mention to Drew Flood and Stephen Butterly for their tireless efforts raising funds for Aware year on year and the overwhelming hospitality we received whenever we met at various events. I look forward to catching up in the future.”

Conor Martin | Senior Associate | Public Sector & Government Services

Raising Awareness and Employee Engagement

In collaboration with Aware, we introduced mental health workshops and webinars for our employees, aimed at equipping our team members with tools to prioritise mental well-being. The “Positive Mental Health at Work: Building Strength for the Future” webinar was conducted to enhance employees’ understanding of the need and benefits of wellness in the workplace. Additionally, Aware facilitated half-day workshops on “Managing Mental Health in the Workplace” for our senior leadership and management teams. These informative sessions provided valuable insights and practical tips for fostering mental health conversations.

“Aware offers invaluable services to those struggling with depression, and I strongly believe that funding for their work is both crucial and impactful. It was truly an honour to contribute to raising money for this vital charity. I hope the funds we gathered have made a difference, helping someone navigate their challenging times.”

Adam Lucey | Associate | Tax Services

Reflecting on the collaboration, James O’Connor, Managing Partner at Crowleys DFK, said:

“Partnering with Aware has been an incredibly rewarding initiative. Mental health touches all of our lives, and it’s been inspiring to see our employees come together in support of this essential cause. We’re incredibly proud of what we’ve accomplished together and look forward to continuing our advocacy for mental health in the years ahead.”

Drew Flood, Business Development Manager at Aware, also shared:

“Thank you to everyone in Crowleys DFK for an incredible partnership over the last two years. Your support for various events has raised an incredible amount, which will help Aware continue to provide free mental health support across Ireland. Your commitment to corporate social responsibility has made a significant impact and thank you for prioritising mental health. On behalf of the tens of thousands of people who engage with Aware’s services each year, I extend a heartfelt thank you.”

Though the formal partnership has concluded, Crowleys DFK remains committed to supporting mental health initiatives. As we move forward, we aim to build on the mental health resources and support available to our employees, while also exploring new opportunities for collaboration. Mental health will remain central to our wellness and well-being mission in the years ahead.

To everyone who donated, participated in events, and supported our partnership, we extend our heartfelt thanks. Together, we have made a real difference

For more information on how you can continue to support mental health initiatives, please visit Aware. Let’s continue the conversation around mental health and work towards a future where everyone feels supported, valued, and heard.

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Crowleys DFK Celebrates Success with Five New Promotions

Crowleys DFK Celebrates Success with Five New Promotions

We are very proud to announce the promotion of five dedicated team members to key management positions. These promotions are a testament to their hard work, commitment, and leadership within the firm, and demonstrate Crowleys DFK’s ongoing focus on nurturing talent from within.

Meet Our Newly Promoted Team Members

Managing Partner James O’Connor stated:

“We are incredibly proud of Brian, Lawrence, Lara, Domenic and Angeline and their contributions to the firm. Their new roles as Managers and Assistant Managers come at an exciting time for Crowleys DFK, as we embrace the opportunities in the aviation sector from our recent merger with MoyleRoe and prepare to celebrate fifty years in business next year.”

These promotions represent our continued investment in the development and growth of our people. By empowering these leaders, we are ensuring that our commitment to innovation, client focus, and operational excellence are upheld at every level.

Congratulations to all on their well-deserved promotions.

If you are interested in developing your career with Crowleys DFK, please visit our Careers page. 

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Public Sector Climate Action Mandate 2024 – What You Need to Know

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Public Sector Climate Action Mandate 2024

The Public Sector Climate Action Mandate (PSCAM) for 2024 was approved and updated by Government in December 2023 in preparation for Climate Action Plan 2024 (CAP24). The aim of the PSCAM is to support public sector bodies covered by CAP24 that have targets to reduce greenhouse gas emissions and improve energy efficiency by 2030. The Mandate sets out goals and targets that must be actioned by public sector bodies. The 2024 Mandate is an expansion of the 2023 Mandate in which existing actions have been added and expanded. This article will talk through the updated Mandate, explain its purpose and describe the new requirements that it presents.

What is the Mandate?

The aim of the PSCAM is to support public sector bodies in Ireland covered by CAP24 that have targets to reduce greenhouse gas emissions by 51% by 2030. The Mandate also supports targets to improve energy efficiency in the public sector by 50% by 2030. Each public sector body to which the Mandate applies is to develop a Climate Action Roadmap that will outline how it will deliver on energy efficiency and reduced emissions targets. Guidelines to develop Climate Action Roadmaps are provided by the Sustainable Energy Authority Ireland (SEAI) and the Environmental Protection Agency (EPA). It should be noted that the Mandate does not apply to every public sector body. Local Authorities, Commercial Semi- State Bodies, and schools are exempt from adhering to the Mandate. The Mandate specifies how public bodies covered by the Mandate may use Green Public Procurement (GPP) as a process to meet an organisation’s needs for goods, services, works, and utilities by choosing solutions that have a reduced impact on the environment.

Status of the 2023 Mandate

Many of the requirements found in the 2024 Mandate are unchanged from previous years. For example, the requirement to establish and support Green Teams remains unaltered, and senior management and members of State Boards are still required to complete a climate action leadership training course. As well as this, nothing has been removed from the Mandate, meaning that any work that has been completed to fulfil the previous Mandate remains valid. The updated mandate expands on Green Public Procurement requirements outlined in the previous mandate, with additional requirements that relate to construction, water use, paper use, and waste management in an organisation.

Changes from the 2023 Mandate

  • A new requirement related to construction that states that best practice guidelines must be adhered to for the preparation of Resource and Waste Management Plans for construction and demolition projects for procured or supported construction projects from 2024.
  • A new requirement on targeting food waste on premises from 2024 by using a standardised food waste measurement approach as outlined in the EPA Protocol Pathway.
  • A new requirement stating that all contract arrangements related to food and canteen services must also address food waste prevention and food waste segregation.
  • A new requirement that states that water refill points should be provided for staff and that the usage of the refill points should be measured and monitored.
  • A new requirement to gradually eliminate the use of single use items for events.
  • A new requirement for the collection and recycling of produce, requiring that waste collection services are segregated into a minimum of three streams: residual/general waste, recycling waste and organic/biowaste.
  • A new requirement related to paper that states that paper consumption should be measured and monitored.
  • An amendment stating that the planning of deep-retrofit building measures for Public Sector bodies and sectoral groups should be undertaken at sectoral level for homogenous sectors.
  • An amendment stating that public sector bodies with a large estate should develop a portfolio building stock plan, in line with guidance published by SEAI. The previous mandate stated that the EPBD was to be consulted for guidance.
  • A new requirement stating that small public sector bodies should include a basic building stock analysis or statement as part of their Climate Action Roadmap, in line with guidance published by SEAI.
  • A new requirement stating that public sector bodies with a vehicle fleet should develop a plan for the installation of charging infrastructure in relevant locations and should be included in an organisation’s Climate Action Roadmap.

Taken together, meeting the new Mandate will require attentive work. Crowleys DFK’s team of subject matter specialists are available to assist your development to meet these requirements.                                                

Vincent Teo | Partner & Head of Public Sector & Government Services

Vincent Teo
Partner & Head of Public Sector & Government Services

 Dr. Conor Dowling | Research & Policy Executive | Risk Consulting

Dr. Conor Dowling
Research & Policy Manager
Risk Consulting
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Finance Bill 2024

Finance Bill 2024

The Minister for Finance, Jack Chambers, published the Finance Bill 2024 for approval on Thursday, 10 October. The Bill implements the taxation changes announced on Budget Day. Some of the more notable changes include:

Small Benefit Exemption

  • The increases announced in the Budget will take effect from 1 January 2025.

National Governing Sporting Bodies

  • The Bill introduces an exemption from tax on investments for a period of up to 10 years, provided funds are ultimately used for qualifying activities.
  • DIRT refundable.
  • Donations to National Governing Bodies (NGBs) for the promotion of participation in sports by women and those with disabilities will attract tax relief.
  • Donors (PAYE and Self Assessed) may elect for the tax relief to apply to the sporting body or to themselves.

Pensions

  • Contributions by employers to PRSAs to be capped at 100% of employee’s emoluments from that employment in the previous year of assessment.
  • The Standard Fund Threshold to increase to €2.8m by 2029 and from 2030 will be indexed linked.

Stamp Duty

  • Bulk Acquisitions – higher rate of Stamp Duty at 15% will apply to the acquisition of 10 or more residential properties in any 12 month period. Increased rate will not apply to apartments.
  • New rate of 6% on residential properties over €1.5m will not apply to acquisitions involving three or more apartments.

 

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Budget 2025 Analysis

Budget 2025 Analysis

On the day the rate of inflation within the Eurozone dropped to 2% and against a backdrop of calls from economists warning against overheating the economy, Minister Jack Chambers delivered an €8.3bn budget comprising of €1.4bn in tax measures and €6.9bn in public spending.

A budget surplus of €23.7bn was recorded, boosted largely by Corporation Tax receipts and the Apple Tax judgement proceeds. But when these are excluded, there was a general deficit. It was acknowledged that the Apple back-tax must be used wisely on significant long-term investments in public services such as housing, water, electricity, and transport.

Income tax changes were mainly limited to a threshold increase to €44,000, above which the higher 40% rate of tax would apply and small increases to the main income tax credits and USC rates.

For the SME sector, we see positive enhancements made to The Employment Investment Incentive Scheme (EII) and the commitment to introduce the new capital gains tax rate of 16% for angel investors when disposing of a qualifying investment. The changes will help encourage investment in innovative start-up SME’s and unlock more equity investment in smaller, early stage businesses that are typically most in need of funding.

Also in this sphere, the decision to include Class S PRSI payments in the calculation for the Start-Up relief is welcomed. Although it is somewhat diluted by capping the payment at €1,000 per individual.

The decision to increase the aggregate small benefit an employer can give an employee to €1,500 along with increasing the number of annual benefits from two to five should hopefully address some of the issues that have recently arisen with the new Enhanced Reporting Requirements.

To address concerns over bulk purchasing of residential properties the rate of stamp duty is being increased to 15%. However, its doubtful a 5% rate hike will have the desired effect.

Mindful of implications for large companies under the OECD Pillar Two Agreement it is interesting to note the introduction of a participation exemption option for dividends from foreign subsidiaries and the commitment to address the taxation of foreign branches.

Pre-budget, the feeling was that the Budget would see some significant changes in funding rules associated with PRSAs. However, the minister’s speech lacked any comments on this area. Perhaps it’s a case of wait for the Finance Bill.

The changes to personal tax and welfare support measures will grab the media headlines. However, it is the commitment to FDI and support to grow the domestic SME sector that is vital for a stable economy.

View the Budget 2025 highlights here.

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Budget 2025 Highlights

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Budget 2025 Highlights

Minister for Finance, Jack Chambers delivered the final Budget today, 1 October 2023. Below we outline the highlights of Budget 2025.

Personal Tax

  • Income Tax Standard Rate Bands increase by €2,000 to €44,000 (single person), with the married single earner band increasing to €53,000, and the married dual income band increasing to €88,000.
  • Personal, PAYE, Earned Tax Credits to increase by €125 to €2,000.
  • Home Carer and Single Person Child Carer Tax Credits will increase by €150 to €1,950 and €1,900 respectively.
  • Incapacitated Child and Blind Person’s Tax Credits will increase by €300 to €3,800 and €1,950 respectively.
  • Small change to the second rate-band of Universal Social Charge which will increase from €25,760 to €27,382. The 4% rate is reducing to 3% from 1 January 2025.
  • Alignment to the tax treatment of Automatic Enrolment Retirement Savings Schemes so that they are similar to that of PRSAs. Employer contributions are tax relieved. Funds grow tax free and a tax-free lump sum can be taken on draw down of the fund up to a maximum of €200,000.

 Enterprise/SMEs

  • Ireland is the only country in the EU which taxes dividends from foreign subsidiaries. It is proposed to introduce a participation exemption for Foreign Dividends to simplify the double taxation relief provisions. Companies will have an option to claim the exemption or continue to use the existing tax and credit relief by way of an election on the company’s annual Corporation Tax return. The exemption will apply for distributions received on or after the 1 January 2025.
  • Capital Gains Tax Relief for Angel Investment to encourage investment in innovative start-ups is to commence shortly. Qualifying investments will be certified by Enterprise Ireland with a minimum investment in new shares of at least €10,000. Relief will apply if shares are held for at least 3 years. A reduced rate of Capital Gains Tax of 16% will apply on a gain of up to twice the initial investment. A lifetime limit of €10m will apply to the relief.
  • A 12-year clawback period for Retirement Relief on disposals to children on businesses valued at over €10m.
  • The various reliefs for Investment in Corporate Trades are being extended for a further two years to 31 December 2025. The €500,000 investor limit on EII investment is being increased to €1m, while it is being increased to €980,000 for SURE investments.
  • The first-year payment threshold for the Research & Development Tax Credit is being increased to €75,000. The first-year payment threshold, which allows for a claim to be repaid in full rather than spread over 3 years.
  • The Section 486C Start Up Relief is currently calculated by reference to the amount of employer PRSI paid – up to €5,000 per employee. It is proposed that amounts paid under Class S will also be considered, subject to a maximum of €1,000 per individual.
  • New relief for up to €1m of expenses incurred on companies on their first listing on a recognised stock exchange in Ireland or the EU/EEA area. The relief is to support companies in the scale up phase of their growth and development.
  • The cumulative tax-free limit for small benefit exemption is being increased to €1,500 and the number of times an employer can provide a benefit is being increased from two to five per annum.
  • An exemption from taxable benefit in kind on the provision of EV home chargers.
  • The CO2 thresholds for claiming capital allowances on business cars is being revised downwards from 2027. An expenditure of €24,000 will be allowable for cars with CO2 emissions of 0-120g/km, a reduced €12,000 for vehicles with emissions of 121-140g/km and no zero for vehicles with CO2 emissions greater than 141g/km.

Agri-Food Sector

  • CAT Agricultural Relief will now require that the donor must meet a 6-year Active Farmer test.
  • The measures for Stock Relief which were due to expire at the end of 2024 are being extended to the end of 2027.
  • 50% Accelerated capital allowances for farm safety equipment.
  • Farmer’s Flat Rate VAT compensation being increased to 5.1%.

 Housing/Cost of Living Measures

  • The Rent Tax Credit is being increased by €250.
  • The deduction for pre-letting expenditure from rental income will be extended for a further three years, to the end of 2027. The deduction is capped at €10,000 per property.
  • The Help to Buy (HTB) scheme is being extended to the end of 2029.
  • The Stamp Duty rate applied where 10 or more residential properties are acquired in any 12-month period is being increased from 2 October 2024 from 10% to 15%. In addition, a 6% rate will apply to residential properties valued excess of €1.5m.
  • A temporary one-year Mortgage Interest Tax Relief introduced last year is being extended for a further year. Relief will be available for the increased mortgage interest paid in 2024 over 2022. The relief is capped at €1,250 per property and applies to mortgages outstanding of between €80,000 and €500,000 on the 31 December 2022 and fully LPT compliant. Relief is at the standard rate.
  • The rate of the Vacant Homes Tax is again increased with effect from 1 November 2024 to 7 times the property’s existing LPT liability.
  • The 9% VAT rate for Gas and Electricity supplies is extended to 30 April 2025.

 VAT

  • The registration thresholds are being slightly increased to €42,500 for the supply of services and €85,000 for the supply of goods from 1 January 2025.
  • The supply and installation of heat pumps is reduced from 23% to 9%.
  • The Farming VAT Flat Rate is being reduced to 5.1% from 1 January 2025.

Other Measures

  • The universal relief of €10,000 to the OMV for vehicles in Category A-D is extended for a further year to end 2025.
  • The Capital Acquisitions Tax thresholds are being increased as follows.
    • Category A threshold €400,000
    • Category B threshold €40,000
    • Category C threshold €20,000
  • Two new audio-visual incentives are being introduced. Both require European Commission approval.
    • A Corporation Tax credit for expenditure on unscripted productions. The credit will be granted at 20% of the expenditure up to a limit of €15m per project.
    • Scéal Uplift for film production up to a maximum expenditure of €20m. This incentive will form part of section 481 Film Relief.

Read our tax team’s analysis of Budget 2025.

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