Jennifer Whitmore
Question:151. Deputy Jennifer Whitmore asked the Tánaiste and Minister for Finance for an update on the introduction of a windfall tax for large energy companies. [65222/26]
View answerTax Collection
Questions (151)
Written answers
The Government is conscious of the increased financial pressure on households and businesses in recent months arising from conflict in the Middle East. In response, this Government has delivered one of the largest support packages in the EU per head capita with over €1.3 billion in supports. This includes the reduction of excise on petrol and diesel, extending the fuel allowance season by a further four weeks, and targeted relief to haulage and bus passenger operators. Measures have also been taken to assist farmers, agricultural contractors, and fishers facing unprecedented increases in fuel costs.
As the Deputy is aware, the European Commission's AccelerateEU Communication addresses the EU's rising energy costs and volatile fossil fuel markets and aims to accelerate the clean energy transition and strengthen EU energy resilience. While the Communication notes Member States may take domestic measures, no EU-wide approach has yet been agreed. The temporary solidarity contribution, TSC, was introduced in line with Council Regulation 2022/1854 of 6 October 2022 to tackle windfall gains being made in the energy sector at the time, following the commencement of war in Ukraine. The TSC formed part of a co-ordinated European response, reflecting the highly interconnected nature of EU energy markets - when we acted, we did so at an EU level - and a view that an emergency intervention to mitigate the effects of high energy prices at the time could not be sufficiently achieved by Member States individually.
It continues to be the Government's view that tackling the energy crisis in a co-ordinated way between EU member states is preferable, given the interconnectedness of EU energy markets.
As Minister of Finance, and in the context of Ireland’s Presidency of the Council of the EU, I received a joint letter from six EU Member States regarding the possibility of a windfall levy on exceptional profits made by oil companies as a result of heightened prices due to the conflict in the Middle East.
Governments across Europe are rightly attentive to developments in energy markets and their impact on households, businesses and the wider economy. The topic was discussed as part of the recent informal ECOFIN in Dublin and I have requested the Commission to reflect on those discussions and report back on this issue at the upcoming ECOFIN in October.
When introducing any measure, particularly in the context of global crises, policymakers must strike a balance between addressing short-term distributional concerns and safeguarding longer-term objectives such as energy security, investment certainty and the pace of decarbonisation.
It is the Government's view that the best long-term approach for Ireland to insulate consumers from volatility on international wholesale energy markets is to invest in energy efficiency and renewable energy. Cutting our dependence on fossil fuels and generating power from our own renewable sources will ensure a cleaner, cheaper energy future in the long term.
Budget 2027
Questions (152)
Albert Dolan
Question:152. Deputy Albert Dolan asked the Tánaiste and Minister for Finance whether, in the context of Budget 2027, he will consider measures through the taxation system to recognise the significantly higher transport costs faced by workers living in rural areas who have limited or no access to public transport and are therefore dependent on private cars to travel to work; and whether consideration will be given to a targeted rural commuter tax credit or other form of relief. [68354/26]
View answerWritten answers
There are a number of issues that the Government are actively endeavouring to advance to provide assistance and certainty to people when it comes to energy, including auto fuels, while also being honest with people that there is no Government in the world that can absorb all of the impact of a global energy shock.
The Government has already temporarily reduced the Mineral Oil Tax applying to petrol, auto diesel and Marked Gas Oil (MGO). Inclusive of the reduction in the NORA levy, these changes save consumers and businesses:
• 27 cent per litre of petrol,
• 32 cent per litre of auto diesel, and
• 7.4 cent per litre of MGO.
These temporary reductions were due to expire on 31 August but were extended in full until 31 October with a phased restoration to pre-reduction levels due to take place between 1 November and 28 February 2027.
I have already signalled my intention to further examine these measures. Policy options in respect of support measures will have due regard to the overall budgetary position as well as EU legislative frameworks.
There are already a number of measures in place to assist commuters.
For example, to encourage the uptake of more sustainable and environmentally friendly transport options, persons commuting to work can already avail of the TaxSaver scheme in respect of public transport; and the cycle to work scheme.
Furthermore, employees may also claim a tax deduction in respect of:
(a) the cost of travelling expenses necessarily incurred in the performance of the duties of their employment or office; and
(b) the cost of other expenses incurred wholly, exclusively and necessarily in the performance of the duties of their employment.
However, these deductions do not ordinarily include the cost of travelling to and from a principal place of work.
As with all proposals for the introduction of new tax measures or the amendment of existing tax reliefs, the proposal should be assessed in accordance with the Department of Finance Tax Expenditure Guidelines. The guidelines make clear the importance that any policy proposal which involves tax expenditures should only occur in limited circumstances where there are demonstrable market failures and where a tax-based incentive is more efficient than a direct expenditure intervention.
As the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances. It is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.
Tax Exemptions
Questions (153)
Shay Brennan
Question:153. Deputy Shay Brennan asked the Tánaiste and Minister for Finance if investment by the providers of planned new personal investment accounts using moneys invested through the new accounts will be subject to deemed disposal taxation. [68283/26]
View answerWritten answers
Encouraging retail investment remains a key priority of mine. As the Deputy is aware, Budget 2026 included a commitment to publish a Roadmap: ‘Taxation of Retail Investment – A New Path Forward for Ireland’, setting out the intended approach to simplify and adapt the tax framework to encourage retail investment while retaining necessary and important anti-avoidance protections, in a proportionate manner.
The Roadmap for retail investment was published recently on 31 August.
A central part of the Roadmap is the inclusion of key parameters of the proposed new investment account, acknowledging the need for industry to understand how the account is intended to operate. This information is to facilitate the design and introduction of the necessary operational systems by providers, to allow accounts to be available from 2027, with the specific details of the investment account forming part of the normal budgetary process in October 2026. The intention is to legislate for the account in 2026 and to allow accounts to be offered from 2027.
As mentioned in the Roadmap, the current taxation regime for retail investment, including the deemed disposal rule, will not apply to the new account.
Small and Medium Enterprises
Questions (154)
Martin Daly
Question:154. Deputy Martin Daly asked the Tánaiste and Minister for Finance the measures he is taking to increase the uptake of State-supported finance by SMEs in the western region; the geographical distribution of lending supported through the Strategic Banking Corporation of Ireland; and whether further measures are being considered to improve access to finance for businesses in counties Roscommon and Galway. [68570/26]
View answerWritten answers
The Government-backed Growth and Sustainability Loan Scheme is designed to support business access low-cost, long-term funding when investing in their growth or resilience or climate action and environmental sustainability. The scheme is sponsored by the Department of Enterprise, Tourism and Employment and the Department of Agriculture, Food and the Marine with support from the European Investment Bank Group (EIBG) and delivered by the Strategic Banking Corporation of Ireland (SBCI) through on lenders.
The SBCI was established in 2014 as Ireland’s national promotional bank under the aegis of my Department. SBCI’s mission is to deliver financial supports that address failures in the Irish credit market, while driving competition and innovation and ensuring the efficient use of available EU resources. The SBCI provides funding to borrowers (mainly to Irish SMEs) via ‘on lenders’ that is, banks, non-banks and credit unions. Since its establishment in 2014, the SBCI has provided about €5 billion in lending to more than 66,000 SMEs, to end June 2026.
The scheme closed for applications on 22 May 2026, as the lending pipeline was fully subscribed. Some of the loans are still in the process of being drawn down. Up to 31 August 2026, 2,169 loans were drawn down to the value of €489.2 million.
I’m pleased to say that the Government agreed to resource series 2 of the Growth and Sustainability Loan Scheme and it is due to be launched to market very soon. This will provide funding of another €500 million for SMEs and small mid-caps, including farmers, fishers and foresters nationwide.
Further lending products currently available to SMEs provided by SBCI on-lenders include, the €50 million “Green Transition Finance Product” supports the green and sustainable transition of SMEs and small mid-cap companies. This product is available from Business Venture Partners (BVP). Information on this product can also be found on the SBCI website, under the heading “Our Products”.
Microfinance Ireland was established to address a key funding gap for viable microenterprises that are unable to access finance through traditional commercial lending channels. MFI plays a vital role in supporting microenterprises, start-ups and sole traders by providing access to finance that enables businesses to start, sustain and grow.
MFI now offers loans ranging from €2,000 to €50,000 for terms of up to five years. Loans designed to support working capital requirements, including managing operating costs, are generally provided over a three-year term, while longer repayment periods of up to five years are available for capital investment projects. Interest rates range from 5.5% for applicants referred through Local Enterprise Offices (LEOs) to 6.5% for direct applications.
Since its establishment in 2012 and up to 30 June 2026, Microfinance Ireland has approved 6,426 loans valued at €112.8 million, supporting 12,694 jobs nationwide.
The Western Investment Fund, managed by the Western Development Commission, provides equity finance and loans to business, communities, social enterprises, strategic initiatives and the creative industry based in the Western Region of Ireland. Its “Business Investment” pillar provides loans for SMES, including equity investments, while its “Creative Industry Investment” pillar provides for a “Creative Micro Loan fund” and a “WRAP Fund”, to support audiovisual businesses.
The Seed and Venture Capital Scheme was established in 1994 and since then the scheme has invested €700m to support and sustain national and regional innovation, which in turn has leveraged €3.3bn in private investment.
The Scheme, which is administered by Enterprise Ireland, provides vital funding for Irish companies in their early stages of development, and is an important step in developing and growing Irish equity funding. Following the first open call for the current Scheme, which received huge interest, Enterprise Ireland made their first commitments in Q4 of 2025, under which €120m was allocated to 9 funds.
The table below provided by the SBCI provides a breakdown of the SBCI’s lending by region for the years 2023-2025.
Small and Medium Enterprises
Questions (155)
Paul McAuliffe
Question:155. Deputy Paul McAuliffe asked the Tánaiste and Minister for Finance if he is considering any initiatives to make it a simpler process for SMEs to switch banks. [68501/26]
View answerWritten answers
The Central Bank of Ireland’s Consumer Protection Code applies to individual consumers and SMEs with a turnover under €5 million per annum.
The Consumer Protection Code 2025 places a strong emphasis on ensuring consumers receive clear information and are supported to make informed switching decisions.
The revised Code moves from a simple "disclosure" approach to an "informing effectively" approach, meaning information must be understandable and useful to the consumer. When dealing with customers who may benefit from switching, firms must also consider customer outcomes and provide information in a way that supports good decision-making.
In relation to personal consumers and certain small business accounts, the Central Bank of Ireland also maintains a Code of Conduct on the Switching of Payment Accounts with Payment Service Providers, which sets out how banks and payment service providers must facilitate switching current accounts and payment accounts.
There are a number of commercial comparison websites which can help consumers and small businesses when thinking about switching providers.
I note that the “The Cost of Business Advisory Forum” Final Report was recently published by the Department of Enterprise, Tourism and Employment. My Department is considering the report which includes a recommendation in relation to the process of switching banks for business customers.
Tax Reliefs
Questions (156)
Tom Brabazon
Question:156. Deputy Tom Brabazon asked the Tánaiste and Minister for Finance if he plans tax changes to support first time buyers. [68538/26]
View answerWritten answers
The primary tax-based support for first time buyers is the Help to Buy (HTB) incentive. It is a tax-based scheme to assist first-time purchasers with the deposit they need to buy or build a new house or apartment. It also aims to encourage additional supply of new houses by supporting demand.
HTB provides a refund of Income Tax and Deposit Interest Retention Tax (DIRT) paid in Ireland over the previous four years, subject to limits outlined in the legislation.
The level of support available to first time buyers under the HTB scheme, is whichever is the lesser of:
• €30,000; or
• 10 per cent of the purchase price of the new property; or
• the amount of Income Tax and DIRT paid in the four years before application for the relief.
For a property to qualify for the HTB scheme, it must be new or converted for use as a dwelling, having not previously been used as a dwelling. Additionally, the purchase value/approved valuation of the property must not exceed €500,000.
Based on the latest available data (31 August 2026), the scheme has supported over 69,000 individuals or couples to buy or build their own home.
The Programme for Government commits to the retention and revision of the HTB scheme.
As the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, having regard to the sound management of the public finances and the commitments set out in the Programme for Government and the impact any proposed changes would have on the wider housing market. It is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.
Departmental Policies
Questions (157)
Seán Ó Fearghaíl
Question:157. Deputy Seán Ó Fearghaíl asked the Tánaiste and Minister for Finance if he will act to reduce the cost of appealing Revenue assessments as recommended by the report of the Cost of Business Advisory Forum. [68413/26]
View answerWritten answers
I welcome the recent publication of the report of the Cost of Business Advisory Forum. The Forum’s findings are the result of extensive collaboration and engagement between numerous stakeholders. The report makes recommendations across a number of topic areas, some of which fall under my Department’s remit. My officials and I are considering the recommendations made. This includes the matter of tax appeals.
When a taxpayer does not agree with a Revenue assessment, they may appeal that assessment to the Tax Appeals Commission (“TAC”). The TAC was established in 2016 with the goal of providing a modern, independent and efficient appeals process in relation to the hearing and adjudication of all tax appeals.
The appeals process is free to access. However, parties involved in an appeal may choose to engage with external support such as legal advisors, professional services, or stenographers. Any costs incurred through the engagement of these services is at the discretion of the parties involved.
I am advised by the TAC that, between 2024 and 2026 to date, around 70% of all appeals were without representation. The average duration of appeals that were received in 2025 was 3.3 months from receipt to closure. More than 88% of 2025 appeals were closed without going to hearing. Appeal Commissioners are obliged to avoid undue formality in managing and conducting appeal proceedings. It is also the case that many appeals are settled before they proceed to hearing.
That said, I acknowledge the points raised by the Cost of Business Advisory Forum, particularly in respect of the impact on small businesses. It is important that the tax appeals process remains accessible and efficient for all taxpayers.
Government will give careful consideration to the Forum’s recommendations as we continue to take practical and targeted action to support businesses, enhance competitiveness, sustain economic growth and job creation across Ireland. My officials and I will consider the findings of the Forum and other stakeholders, in consultation with the TAC.
Budget 2027
Questions (158)
Grace Boland
Question:158. Deputy Grace Boland asked the Tánaiste and Minister for Finance his views on the scope in Budget 2027 for income tax measures to support working people and ensure that increases in earnings translate into meaningful increases in take home pay. [68585/26]
View answerWritten answers
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 while in the event of an economic downturn and unexpected deterioration in the public finances we would postpone changes to Income Tax credits or bands, as we did in Budget 2021”.
This Government has committed to, and will stand by, its Programme for Government commitment to make progressive changes to personal income tax, if the economy remains strong over its lifetime.
The Summer Economic Statement set out the parameters of Budget 2027. As you will be aware Budget 2027 will comprise of an overall package of €8.5 billion. Of this, €7 billion will be allocated for public spending, while a €1.5 billion package will be allocated for new taxation measures. This will be centred around a personal income package which will support workers.
However, as the Deputy will appreciate, it is longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.
Fuel Prices
Questions (159, 179, 186)
John Connolly
Question:159. Deputy John Connolly asked the Tánaiste and Minister for Finance if he has plans to review the tax treatment of home heating oil. [68451/26]
View answer
Darren O'Rourke
Question:179. Deputy Darren O'Rourke asked the Tánaiste and Minister for Finance the measures he will take to reduce the cost of home heating oil. [67871/26]
View answer
Pearse Doherty
Question:186. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the analysis he has undertaken to examine the tax measures available to reduce the cost of home heating oil. [68624/26]
View answerWritten answers
I propose to take Questions Nos. 159, 179 and 186 together.
The Government is very conscious of the price increases in home heating oil as a result of the conflict in the Middle East. The spikes in the price of home heating oil are not as a result of taxes, nor Government policy, but due to the wholesale market price of crude oil, which is the globally traded benchmark commodity that is the main input into refined products like home heating oil. The disruption to commodity flows through the Strait of Hormuz has had a particularly large impact on some of these refined products, in particular diesel and kerosene.
In order to ease the financial burden on households, earlier this year the Government extended the fuel allowance by a further four weeks, resulting in additional payments of €152 to each of the 470,000 fuel allowance recipients. It meant that a typical household receiving the fuel allowance will have received €1,216 over the course of the fuel allowance season.
The Government also deferred the planned increase in carbon tax on home heating fuels, which was due to occur on 1 May, until 14 October.
It is also important to note that these measures were in addition to a range of measures included in Budget 2026 such as enhanced social protection payments including an increase to the Fuel Allowance rate, and an expansion in the Fuel Allowance eligibility rules, which is benefitting approximately 50,000 additional households.
Carbon tax remains an important part of Ireland’s overall commitment to tackling climate change and to lessen Ireland's dependence on fossil fuels, with successive annual budgets providing additional funds for targeted social protection payments, residential and energy efficiency measures, as well as funding to encourage green farming practices.
As of Budget 2026, the Government has allocated over €4.2 billion in carbon tax revenue for these purposes since 2020. ESRI analysis consistently shows the lower income deciles are better off as a result of the social protection measures funded by the increased carbon tax.
By incentivising a switch to cleaner energy sources and making funds available to help households to make that switch, it thus helps to tackle the significant threats and costs to society that our fossil fuel dependence perpetuates. Carbon Tax should not be looked at in isolation but as part of a broader suite of measures designed to reduce our fossil fuel dependence.
Government is examining the different levers available to it in relation to the cost of home heating oil. This analysis includes market and price trend monitoring, as well as tracking current and future global oil market prices and dynamics, an assessment of the household impact of potential policy measures on the cost of a fill of home heating oil, assessing the overall Exchequer cost of potential measures, and the reach and potential efficacy of these measures, as well as assessing their legality as regards EU regulations and directives.
The Carbon Tax is reviewed annually in the Tax Strategy Group papers. The Tax Strategy Group papers are published in advance of the Budget to facilitate informed discussion. The latest version is available on my Department's website at: www.gov.ie/en/department-of-finance/collections/budget-2027-tax-strategy-group-papers/.
Annually, a distributional analysis of the overall Budget tax and welfare package including the specific impact of the carbon tax policy is assessed in the Budget Publication Beyond GDP - A Quality of Life Assessment, previous versions of which are available on the budget website: www.budget.gov.ie.
Separately, the Department of Public Expenditure, Infrastructure, Public Service Reform and Digitalisation issues an annual publication on Budget Day titled The Use of Carbon Tax Funds, which contains detail on the allocation of Carbon tax funds, and includes information on the programmes funded from Carbon Tax amounts. The most recent version is available at the link below with all previous versions available on the www.budget.gov.ie website under Budget Publications for each respective year.
www.gov.ie/en/department-of-public-expenditure-infrastructure-public-service-reform-and-digitalisation/publications/budget-2026-the-use-of-carbon-tax-funds/.
To counteract any potential regressive impact of carbon tax and to give effect to the Programme for Government commitments to protect the vulnerable, a targeted package of social protection interventions is developed. This package is informed by ESRI research commissioned to ensure that the carbon tax policy is progressive and prevents fuel poverty.
Policy decisions are also informed by various interdepartmental and stakeholders groups and take consideration of pre-budget submissions and correspondence from individuals, and with due regard to Programme for Government commitments, such as continuing with the planned carbon tax increases, aligning with recommendations from the Climate Change Advisory Council and scientific experts.
Policy options in respect of home heating oil will have due regard to the overall budgetary position as well as EU legislative frameworks; these include the EU Energy Tax Directive (ETD), the EU VAT Directive, and the EU Emissions Trading System for buildings, road transport and additional sectors (ETS2), among others.
It is a longstanding practice of the Minister for Finance not to comment, in advance of the Budget, on the specifics of any measures that might be the subject of Budget decisions.
Question No. 160 answered with Question No. 143.
Question No. 161 answered with Question No. 143.
Question No. 162 answered with Question No. 143.
Fuel Prices
Questions (163)
Barry Ward
Question:163. Deputy Barry Ward asked the Tánaiste and Minister for Finance his views on the merits of financially incentivising the use of HVO fuel instead of diesel to support achieving our climate emission targets, and in the context of significant price increases on fossil fuels. [68250/26]
View answerWritten answers
The Mineral Oil Tax treatment of biofuels, including HVO, already financially incentivises biofuels over fossil fuels such as diesel. Under section 100(5) of Finance Act 1999 (as amended), biofuels which are produced from biomass qualify for relief from the carbon component of MOT (Carbon Tax), thus incentivising the uptake of more sustainable and renewable fuels. In the case of blended fuels, the biofuel relief applies to the biofuel portion. The effective MOT rates on biofuels, along with comparable MOT rates for fossil fuels, such as auto-diesel, are published on Revenue’s website at: www.revenue.ie/en/companies-and-charities/excise-and-licences/mineral-oil-tax/liquid-substitute-fuels/index.aspx.
The rate of the carbon tax relief for biofuels such as HVO used in place of auto diesel is currently c. 23 cents per litre on a VAT inclusive basis.
As biofuels are relieved of the carbon component of MOT, they are not impacted by annual carbon tax increases. As a result, the MOT rate differential between biofuels and fossil fuels will continue to widen as the 10-year carbon tax trajectory up to 2030 is implemented. I am advised by Revenue that in 2025 the tax forgone under the MOT biofuel relief is estimated at approximately €80 million. This estimate is based on an analysis of MOT returns data across all fuel types and a breakdown in respect of specific biofuels, such as HVO, is not available.
In line with the Programme for Government commitment to support decarbonisation of road freight and commercial coaches with fuels such as Hydrotreated Vegetable Oil (HVO), the tax treatment of HVO in the freight sector and possible further incentives for its use was examined in my Department’s Tax Strategy Group paper on Energy, Environmental and Vehicle Tax ahead of Budget 2026, which is available on my Department’s website at: www.gov.ie/en/department-of-finance/collections/budget-2026-tax-strategy-group-papers/.
This was again examined in the Tax Strategy Group paper on Energy, Environmental and Vehicle Tax paper ahead of Budget 2027, which is also available on my Department's website at: www.gov.ie/en/department-of-finance/collections/budget-2027-tax-strategy-group-papers/.
While tax levers can support policy measures, it is important to acknowledge that there is a limit to the role they can play in terms of price leverage. The price of HVO is dependent on many market factors.
These matters remain under review.
Tax Collection
Questions (164)
Richard Boyd Barrett
Question:164. Deputy Richard Boyd Barrett asked the Tánaiste and 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]
View answerWritten answers
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.”
Tax Collection
Questions (165)
Barry Ward
Question:165. Deputy Barry Ward asked the Tánaiste and Minister for Finance the position regarding a review of inheritance tax parameters; and if the existing relationship category thresholds can be reviewed. [68251/26]
View answerWritten answers
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.
Tax Reliefs
Questions (166)
Edward Timmins
Question:166. Deputy Edward Timmins asked the Tánaiste and Minister for Finance to amend the standard capital superannuation benefit guidelines (details supplied) so that standard non-cash benefits-in-kind (such as health insurance) received during statutory maternity leave do not disqualify an employee from utilizing the look-back provision to calculate their true average salary; and if he will make a statement on the matter. [67658/26]
View answerWritten answers
Where an ex-gratia payment is chargeable to tax under Schedule E by virtue of section 123 of the Taxes Consolidation Act (TCA) 1997, the payment may qualify for relief or exemption from tax under section 201 and Schedule 3 TCA 1997 as follows:
Basic exemption - a tax-free amount of €10,160, plus €765 per complete year of service.
Increased basic exemption - the basic exemption amount may be increased by an additional €10,000, which is available where an individual has not claimed any exemptions under section 201 TCA 1997 in the previous 10 years and is not a member of an occupational pension scheme.
Standard Capital Superannuation Benefit (SCSB) - this is calculated as outlined below.
These reliefs / exemptions are subject to a lifetime limit of €200,000 and the individual may apply whichever of the three is more beneficial to them.
SCSB is a relief from income tax arising from a lump sum payment connected with the termination of an employment. SCSB is calculated by multiplying 1/15th of the employee's annual taxable emoluments, averaged over the last three years (i.e., 36 months) of his or her service, by the number of complete years of service with the employer, and deducting any tax-free lump sum received or receivable under a pension scheme.
Revenue allows the period of service for the SCSB calculation to be extended where periods of unpaid leave are taken and during that period no “taxable emoluments” are paid from the employer to the employee, such as periods of unpaid maternity leave.
Under section 112 of TCA 1997, “emoluments” means anything which is assessable to income tax under Schedule E (e.g. salary, commission, overtime, notional pay, etc.). All payments made by employers to employees and office holders are regarded as "pay" for tax purposes, and in the absence of a specific relief or exemption, employers must operate PAYE on such payments.
Where an employer provides the cost of medical insurance on behalf of an employee during periods of unpaid leave, the amount paid by the employer is subject to Income Tax as a benefit in kind under Schedule E by virtue of section 118 TCA 1997. Such a benefit is considered a taxable emolument and as a result is included in the calculation of the average taxable emoluments figure for the final three years of service for SCSB purposes. The payment of the medical insurance premium by the employer means that the period(s) of statutory maternity leave are not considered period(s) where there were no “taxable emoluments”, and the amounts paid for the medical insurance are “taxable emoluments” taken into account for the SCSB calculation, in accordance with Schedule 3 TCA 1997.
Further information on the taxation of termination lump sum payments can be found in Revenue’s Tax and Duty Manual Part 05-05-19 Payments on Termination of an Office or Employment or Removal from an Office or Employment which can be accessed on Revenue’s website.
Finally, as the Deputy will appreciate, it is a longstanding practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget or Finance Bill decisions.
Tax Credits
Questions (167)
Richard Boyd Barrett
Question:167. Deputy Richard Boyd Barrett asked the Tánaiste and Minister for Finance his plans to ensure that film producer companies in receipt of section 481 Film Tax Credit, claiming that they are providing quality employment and training, are also required to be the legal employer of the film crew on the film production for which the credit is claimed. [68637/26]
View answerWritten answers
Section 481 TCA 1997, which sets out the legislative basis for the film corporation tax credit, requires that, for the purposes of each application for the credit in respect of a qualifying film, there are two companies, a producer company and a qualifying company.
The “producer company” refers to the continuing production company necessarily carrying on a trade of producing films on an ongoing commercial basis with a view to profit. The producer company applies to the Department of Culture, Communications and Sport for certification of the project as a qualifying film and receives the tax credit in respect of that project.
The “qualifying company” is a company that is incorporated and resident in the State or carrying on a trade in the State through a branch or agency. The qualifying company must exist solely for the purposes of the production of only one qualifying film. All the shares in the qualifying company must be held by the producer company. The two companies are therefore associated, and it is my understanding that the Labour Court has confirmed that associated employers can be connected for the purposes of employment rights.
“Eligible expenditure” must be incurred in the State and paid by the qualifying company. Eligible expenditure is defined as that portion of the total cost of production that is expended in the State and can be, either, expended directly by the qualifying company on the employment of eligible individuals or on the provision of labour only services by someone other than an eligible individual, or expended directly or indirectly by the qualifying company on the provision of goods and services.
As part of the cultural certification process, applicant companies are required to submit an undertaking of compliance with all relevant employment legislation. This commits both the producer company and the qualifying company to compliance with all relevant employment legislation in relation to the film being certified.
While not having a direct role in employment law matters, my Department will encourage stakeholders to address employment issues through negotiations and agreement.
Question No. 168 answered with Question No. 144.
Question No. 169 answered with Question No. 144.
Credit Unions
Questions (170)
Naoise Ó Muirí
Question:170. Deputy Naoise Ó Muirí asked the Tánaiste and Minister for Finance the progress the Government has made in supporting credit unions to expand their capacity for mortgage and business lending. [68404/26]
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The Government is committed to supporting the continued development and expansion of the credit union sector, recognising its important role in providing community-based financial services.
A range of legislative and regulatory measures have already been delivered, and the priority for the rest of 2026 is to support the credit union sector in the development of a strategy for itself. This strategy should build on these measures and focus on developing a shared vision for the sector and the strategic direction required to achieve it, within the current legislative and regulatory framework.
Amended lending regulations, which commenced on 30 September 2025, significantly enhanced the lending capacity of credit unions. The regulations increased the lending limits to 30% of total assets for mortgages and 15% for business loans, thereby enabling credit unions to expand their offerings and compete more effectively in these markets. Based on sector assets of €23 billion at end-June 2026, these changes permit up to €6.9 billion in mortgage lending, and up to €3.45 billion in business lending.
The amendment of these regulations reflects the competence and capability of credit unions to grow their respective loan books in a prudent manner, and to futureproof their offering to support homeowners and businesses. I welcome the amended regulations and thank the Central Bank of Ireland for their work, and support to the sector by amending these regulations.
These regulations will allow credit unions to compete more effectively in the mortgage and business lending market.