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The Minister for Finance Michael McGrath has announced a plan to exempt foreign-sourced dividends from Irish corporate tax in a move toward the territorial regime of taxation.
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The proposed exemption will take shape over the coming months before being introduced in Finance Bill 2024, with effect from 2025.
The Minister’s Roadmap includes a series of consultation questions inviting views from stakeholders to assist with the specific design of a participation exemption for foreign dividends.
Interested stakeholders will also have the opportunity to provide their views on the possible introduction of a foreign branch participation exemption. The Minister wishes to assess the potential benefits and impacts of such an exemption before reaching a final decision on its introduction.
Grant Thornton View
The announcement of the roadmap towards a participation exemption on foreign-sourced dividends is a very welcome development. We would hope that this is closely followed by a foreign branch participation exemption. The adoption of a full territorial regime will bring Ireland in line with other EU and OECD countries, simplify our corporation tax system and help retain Ireland’s position as the ideal location for international groups during a period of critical change in the global tax environment.
Project timeline
| Action | Timeline |
|---|---|
|
Publication of project roadmap, including detailed consultation on introduction of a participation exemption(s) to the Irish corporation tax system |
September 2023 |
|
Close consultation and consider responses |
13 December 2023 |
|
Consideration of responses & further stakeholder engagement |
December 2023 – March 2024 |
|
Feedback Statement 1 (Dividend Exemption) |
End March 2024 |
|
Feedback Statement 2 (Dividend exemption) – if required |
Circa July 2024 |
|
Finance Bill 2024 – Legislate for dividend exemption to take effect from 2025 |
October – December 2024 |
Authors
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Peter Vale Peter has experience in international corporate tax structuring including; financing structures, company migrations and international reorganisations. He has advised clients on the tax aspects of property investments, both domestic and international.View Profile -
Sasha Kerins Sasha is a Tax partner advising international businesses on corporate re-organisations, structuring and acquisitions/disposals, as well as supporting her clients around the key day-to-day tax requirements for their businesses.View Profile -
Sarah Meredith Sarah joined Grant Thornton in 2010 having worked in a professional services firm for over four years. Sarah has extensive international tax experience and is involved in a significant number of group restructuring and acquisition projects for large clients. Sarah advises on a wide range of issues to include transfer pricing, interest limitation rules and both inward and outward bound investment from Ireland.View Profile