Ireland cuts capital gains tax to 31% and expands R&D relief
Ireland’s Budget 2027 cuts the standard capital gains tax rate from 33% to 31% for disposals from 7 October, excluding development land; the Department of Finance estimates the change will cost €186 million a year. The Government also increases early R&D tax-credit payments and subcontracting limits, while a tax adviser quoted by The Irish Times cautions that the CGT cut may be too modest to materially change investment decisions.
Bottom line — The €1 billion ISIF scale-up programme runs for three years, alongside the new tax incentives for Irish businesses.
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The Department of Finance estimates the CGT cut will cost €46.5 million in its first year and €186 million in a full year, The Irish Times reports.
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The new 31% rate does not apply to development land, which remains taxed at 33%, according to The Irish Times.
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The first-year R&D tax-credit payment threshold rises from €87,500 to €105,000; outsourced-work limits also increase, Business Plus reports.
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Business Plus says qualifying R&D wage costs can be increased by 5% for the credit, subject to an expenditure threshold.
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Grant Thornton Ireland tax partner Úna Ryan told The Irish Times the CGT reduction is unlikely to materially alter investment or entrepreneurship decisions.
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The Irish Times reports the Ireland Strategic Investment Fund will invest €1 billion in scaling Irish companies through a three-year programme running to 2030.