211. Deputy Seán Ó Fearghaíl asked the Tánaiste and Minister for Finance the key measures taken to support Ireland's tax competitiveness since January 2025; his priorities for same for the rest of 2026; and if he will make a statement on the matter. [53496/26]

Maintaining Ireland’s tax competitiveness is a key objective particularly in the context of economic uncertainty globally and the evolving international tax reforms.

Budget 2026 and Finance Act 2025 introduced a range of measures designed to support competitiveness, sustain Ireland’s attractiveness for foreign direct investment, support domestic businesses and promote innovation. Some relevant measures provided for in Finance Act 2025 include:

• A number of enhancements to the R&D tax credit regime were introduced in Finance Act 2025, including an increase in the rate of the credit from 30 per cent to 35 per cent and an increase to the first-year payment threshold from €75,000 to €87,500. The primary policy objective of the credit is to increase business R&D in Ireland, as R&D can contribute to higher innovation and productivity. In January this year, following the review of the regime undertaken in 2025, I published the Research & Development Tax Credit Review Report. This was followed in February by the publication of the Research and Development Tax Credit and Innovation Compass, which sets out a medium-term pathway for further work in relation to the R&D tax credit and on potential tax supports on innovation.

• The update and enhancement of the participation exemption for foreign dividends. The participation exemption provides an alternative, much simplified mechanism for double tax relief for multi-national businesses by reducing the complexity and administrative burden of the current system.

• Measures to strengthen the competitiveness of Ireland’s audiovisual sector. An enhanced rate of 40% was announced under the Section 481 Film Tax credit for qualifying VFX work. In addition, the Digital Games Tax credit was extended for a period of 6 years and further enhanced to allow for claims in respect of expenditure incurred on the development of post release content.

• To support opportunities for growth in the funds industry, specifically in the private assets space, a discrete but important tax change in Finance Act 2025 provided for a Dividend Withholding Tax exemption for Investment Limited Partnerships and equivalent EEA partnerships. This measure is intended to increase the attractiveness of the Investment Limited Partnership as a fund structure and to help cement Ireland’s position as a desirable location for regulated investment funds.

• The lifetime limit for Revised Entrepreneur Relief was increased from €1 million to €1.5 million for disposals made from the 1st of January 2026.

With regard to other ongoing work, my Department is also undertaking a review of the tax treatment of interest in Ireland, which seeks to deliver a simplified and competitive taxation regime for interest which is aligned with international best practice. The taxation of interest is complex and is governed by Irish and EU legislation, and the proposed reform is intended to help safeguard Ireland’s competitiveness by providing a sound and stable interest deduction basis for both domestic businesses and inward investment in Ireland.

At EU level, the simplification of legislation is a key component of efforts to enhance competitiveness, including through the simplification of EU tax legislation. In this regard, Ireland engaged actively with the European Commission and Member States on the scope of tax simplification throughout 2025, and ahead of the publication of the European Commission’s tax simplification package in June 2026. The package comprises two legislative proposals – the Recast of the Directive on Administrative Cooperation and the Taxation Omnibus – which, taken together, propose significant amendments to the EU direct tax acquis, spanning 16 Directives. The proposals are intended to reduce administrative and compliance burdens for businesses and support a more competitive business environment across the EU. These objectives are aligned with Ireland’s interest in maintaining a competitive and attractive environment for investment and economic activity. Both the DAC Recast and the Taxation Omnibus feature in Ireland’s Presidency programme, and my officials and I are committed to advancing technical discussions and negotiations on these proposals during Ireland’s Presidency of the Council of the European Union.

At the OECD, Ireland continues to negotiate guidance on the Global Minimum Tax to ease the implementation burden for stakeholders. At the beginning of the year Ireland was part of the agreement on a Side-by-Side System Package to ease the US concerns with the Global Minimum Tax. We remain committed to participating in the constructive dialogue on the digital economy to provide certainty and stability to the business community and avoid disputes and fragmentation of the international tax architecture.

This is a high-level overview of some of the work ongoing in my Department, recognising the need to protect Ireland's competitiveness to support continuing investment and employment in our economy.