Dáil Éireann Debate, Tuesday - 12 May 2026
456. Deputy Michael Cahill asked the Tánaiste and Minister for Finance to urgently review Ireland’s ETF Tax system prior to the upcoming budget, (details supplied); and if he will make a statement on the matter. [34228/26]
Amharc ar fhreagraThe Deputy has asked about the tax system around Exchange Traded Funds (ETFs).
An ETF is an investment fund that is traded on a regulated stock exchange. There is no separate taxation regime specifically for ETFs, and the applicable regime is based on the ETFs domicile.
Under the domestic fund regime, a ‘gross roll-up’ applies such that there is no annual tax on income or gains arising to a fund, but the fund has responsibility to deduct an exit tax in respect of payments made to certain unit holders in that fund. To prevent indefinite or long-term deferral of this exit tax, a disposal is deemed to occur every 8 years. For ETFs, while the fund is not required to apply an exit tax, the Irish resident unit holder will be subject to tax on income and gains arising and must self-assess and include details of income and gains in a timely filing on their income tax return to Revenue.
Gross roll-up does not apply to non-Irish domiciled funds but deemed disposal still applies to investments made by Irish residents in investment funds that are considered equivalent to Irish investment structures and are based in an EU/EEA country or an OECD country that has a Double Taxation Treaty with Ireland. Again investors are required to account for any tax due on a self-assessed basis.
I acknowledge the complexities associated with self-assessment for an investor, but as articulated in the Funds Review report, any changes to the current regime does require guardrails to protect the Exchequer and ensure that appropriate taxation is paid. A balance between supporting retail investment while retaining important and necessary anti-avoidance protections, taking account of potential Exchequer impacts, is required.
I am committed to taking the necessary action to support retail investment in Ireland. Budget 2026 introduced a reduction in the taxation rate that applies to Irish and equivalent offshore funds and Irish and certain foreign life assurance products, from 41% to 38%. This change also applies to investments in Exchange-Traded Funds (ETFs) that are taxed under these regimes.
Budget 2026 also included a commitment to publish a roadmap for the taxation of retail investment, setting out an approach to simplify and adapt the tax framework to further support retail investment while retaining necessary and important anti-avoidance protections in a proportionate manner. The roadmap will be published in the coming months. The roadmap will take the Funds Review and the European Commission's Savings and Investment Account recommendation into consideration. A key aspect of the roadmap is the development of a new Irish investment account that aims to reduce the complexities related to retail investment taxation and allow Irish people to grow their savings more efficiently.
