Ireland

Value-added tax (VAT)

VAT is charged at the standard rate of 23%. This is the default rate of VAT that applies to the supply of goods and services in the course or furtherance of business unless the goods or services qualify for a reduced rate of VAT, the zero-rate of VAT, or are exempt from VAT.

Reduced VAT rates

There are currently two main reduced rates of VAT, being a reduced rate of 13.5% and a super-reduced rate of 9%. The 13.5% rate applies, inter alia, to:

• the supply and development of immovable goods (but please see further below regarding changes that have been introduced in Finance Act 2025 with respect to the VAT rate applicable to the supply of immovable goods as part of a social policy);
• labour-intensive services (e.g. certain repair and related services);
• energy products and supplies; and
• the supply of certain food and drink provided in the course of catering (but see further below regarding changes to the VAT rate that have been introduced in Finance Act 2025).

The 9% rate is applicable to:

• the provision of facilities for taking part in sporting activities;
• the supply of periodicals (e.g. magazines, newsletters, sectoral publications); and
• the supply of certain electronically supplied matter (e.g. periodicals, brochures, catalogues).

Since May 2022, the VAT rate applicable to the supply of electricity and gas (which is ordinarily subject to the 13.5% rate) has been temporarily reduced to 9% as part of government measures to help alleviate energy costs for consumers. Finance Act 2025 has further extended the temporary application of the 9% rate for supplies of electricity and gas until 31 December 2030.

To support the supply of housing as part of social policy in Ireland, legislative changes were introduced as part of Budget 2026 to reduce the VAT rate on the supply and construction of qualifying apartments and apartment blocks (subject to certain conditions). With effect from 26 November 2025 (until 31 December 2030), the 9% rate of VAT will apply to the supply and construction of qualifying apartments and apartment blocks. The supply of certain sites will also qualify for the 9% rate. There have been a number of refinements to the scope of this VAT rate change since it was announced on Budget Day in October 2025 and careful consideration should be exercised when determining the applicability of the 9% rate to the supply of immovable goods.

Finance Act 2025 has reduced the VAT rate for restaurant and catering services as well as hairdressing services from 13.5% to 9%. However, this is a prospective change that will apply from 1 July 2026.

Zero-rate of VAT

The zero-rate of VAT applies to, inter alia:

• the supply of goods dispatched from Ireland to a VAT-registered person in another EU member state, i.e. “intra-Community supplies of goods” (provided certain conditions are satisfied);
• goods exported from Ireland to a place outside of the European Union; and
• the supply of certain food and drink of a kind used for human consumption, oral medicines, books and newspapers (printed, electronic, and audiobooks), the supply and installation of solar panels (on private dwellings and recognised schools), and children’s clothing and footwear.

VAT exemption

Certain supplies are exempt from VAT. The exempt categories include:

• certain activities in the public interest (e.g. postal services, medical and related services, education, and national broadcasting);
• financial services (e.g. certain banking services);
• insurance services;
• betting/gambling services;
• the letting of immovable goods (but an option to tax is possible, subject to certain conditions); and
• by way of an Irish derogation from EU law, passenger transport services.

VAT registration thresholds

The VAT registration turnover thresholds (which relate to turnover in any continuous 12-month period for taxable persons with an establishment in Ireland) are as follows:

• EUR 42,500 for the supply of services; and 
• EUR 85,000 for the supply of goods (including for the supply of goods and services where at least 90% of the turnover is derived from the supply of goods).

There is also a €10,000 threshold for taxable persons making mail-order or intra-Community distance sales of goods and cross-border telecommunications, broadcasting and electronic (‘TBE’) services into the State and a €41,000 threshold for persons making intra-Community acquisitions of goods in Ireland from other EU member states.

In accordance with the EU VAT SME scheme, non-Irish established qualifying small enterprises can avail of the local Irish VAT registration thresholds provided their annual turnover within the EU does not exceed the Union threshold of €100,000.

Central Electronic System of Payment Information (CESOP): New EU tax information reporting requirements

The CESOP Directive (Council Directive (EU) 2020/284) entered into effect on 1 January 2024 and requires payment service providers (PSPs) located in the European Union to collate electronic records on cross-border payments and report this data to relevant tax authorities in the European Union. The aim is to address VAT fraud in the European Union and will allow EU tax authorities to monitor payments made in respect of e-commerce transactions to ensure that they are taxed appropriately. 

The CESOP Directive will only apply to cross-border payments (i.e. domestic payments are excluded), and only PSPs (as defined) are within scope of the reporting requirements. PSPs will be required to file a return on a quarterly basis to the tax authorities in the member state of establishment or in the host member state. 

Fixed penalties will apply to for PSPs who fail to comply with their CESOP reporting and record-keeping obligations.

Customs duties

Ireland is part of the customs territory of the European Union. Goods imported into Ireland from countries outside the European Union (including Great Britain, but not Northern Ireland) are liable to customs duty at the appropriate rates specified in the EU’s Combined Nomenclature (CN) Tariff. These rates vary from 0% to 14% for industrial goods, with much higher rates applicable to agricultural products. Imports may qualify for a partial or full reduction in rates in specific circumstances (e.g. where products meet relevant rules of origin and are considered as ‘originating’ under one of the many Free Trade Agreements that the European Union has negotiated with third countries, such as the EU-UK Trade and Cooperation Agreement).

The three main elements (‘customs duty drivers’) that determine the duty liability arising on goods imported into the European Union from a non-EU country are (i) the product’s commodity code (Tariff Classification), (ii) its customs valuation, and (iii) its origin. 

A number of special customs procedures exist that give full or partial relief from customs duties on the import of goods into the EU from non-EU member states, e.g. Temporary Admission, Customs Warehousing, Inward Processing Relief, and Outward Processing Relief. An analysis of the trade footprint of the importer of the goods will need to be considered in order to determine whether or not they may avail of one of these reliefs. Advance authorisation is generally required from Irish Revenue to use such special procedures. 

Customs duties do not arise on goods ‘imported’ from other EU member states (known as Intra-Community movements), provided the products are in ‘free circulation’ in another EU member state.

Carbon Border Adjustment Mechanism (CBAM): The EU's new carbon charge

The aim of CBAM is to mitigate against carbon leakage whereby companies based in the European Union import carbon-intensive products as part of their manufacturing processes that work against domestic measures introduced in the European Union to tackle carbon intensive manufacturing. It also will encourage more sustainable industrial production outside the European Union. The key products impacted by CBAM are cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen. 

This new measure is underpinned by Regulation (EU) 2023/956. CBAM entered into force on a transitional basis from October 2023. The transitional phase applied from 1 October 2023 until 31 December 2025, during which period CBAM reports were required on a quarterly basis. Annual declarations replaced quarterly declarations from 1 January 2026 onwards. From 2026 onwards, purchase of “CBAM certificates” is required to import CBAM goods (however, the requirement to obtain and pay for CBAM certificates for 2026 imports has been postponed until 2027, providing a cash flow saving). The cost of CBAM certificates relates to the amount of embedded carbon emissions in the imported products). From 1 April 2026, importers of CBAM goods will have to be approved in order to import such goods.

Excise duties

The EU’s harmonised excise duties are charged on energy products (including mineral oils and electricity), which includes a carbon charge component (see below), alcohol products (including spirits, beer, wine, cider and perry), and tobacco products where they are consumed in Ireland. Reduced rates of excise duty may apply to microbreweries and  micro-producers of ciders and perry in Ireland. Relief from alcohol products tax also applies to alcohol in the production of flavours for the preparation either of foodstuffs or of beverages not exceeding 1.2% vol., medicinal products, vinegar, and other specified products. 

A diesel rebate scheme applies in Ireland. It provides hauliers and coach/bus owners with an opportunity to claim a partial refund of excise duty paid on fuel used in specifically designated vehicles for the purposes of transporting goods or passengers.

Excise duties are not charged in Ireland on the export or sale of excisable goods to other EU member states, but special control arrangements apply to these intra-EU movements of such goods.

In addition, Ireland applies excise duties to electricity, betting (including so-called 'free bets' and discounted bets on what would have been the unit stake), natural gas and solid fuel in the form of a carbon charge (see below), sugar (see below), and the first registration of vehicles in the state (the latter is known as VRT).

The VRT regime for motor vehicles is based on a CO2 emissions rating system and charged on the ‘open market selling price’ of the vehicle. Specific reductions in VRT apply to electric and hybrid vehicles, subject to certain conditions being met. In addition, there are reliefs available for cars imported temporarily by non-residents or imported on transfer of residence to Ireland (such VRT reliefs require prior approval from the Customs authorities).

Penalties apply for breaches of excise legislation. 

Stamp duty

Stamp duty is a tax on instruments. It is chargeable on certain instruments (most commonly instruments of transfer) executed in Ireland and on instruments, wherever executed, that relate to Irish property or relate to matters done or to be done in Ireland. 

Transfers that can be effected without the creation of a document (e.g. a transfer of physical goods by delivery or a transfer by operation of law) are generally outside the charge to stamp duty.

Intra-group transfers can generally qualify for relief from stamp duty, subject to meeting certain conditions. A return must be filed to claim this relief.

There is an exemption for transfers of intellectual property (IP), and the categories of IP qualifying for this exemption are the exact same as those for which IP capital allowances are available (see Intellectual property [IP] regime in the Tax credits and incentives section).

Stamp duty is payable based on the higher of the consideration paid for the transfer or the market value of the assets transferring. Rates of 1% to 15% apply for transfers of residential property, 7.5% for transfers of non-residential property (commercial/industrial land and buildings, but also business assets, such as goodwill, debtors, contracts, etc.), and 1% on transfers of shares. A 7.5% rate applies for shares in certain companies deriving their value from Irish non-residential property, and a 15% rate applies for shares in companies deriving their value from Irish houses or duplexes, where particular circumstances exist.

Capital duty on share capital

Ireland does not levy capital duty on share capital of companies.

Capital taxes

Ireland does not levy tax on the net worth of companies.

Payroll taxes

The ‘pay-as-you-earn’ system (PAYE system) places an obligation on employers to make deductions at source of income tax, universal social charge (USC), and pay-related social insurance (PRSI) from payments made to employees and an obligation to remit such deductions to the Irish tax authorities.

Pay-related social insurance (PRSI)

Employed persons are compulsorily insured under a state-administered scheme of PRSI. Contributions are made by both the employer and the employee. Employee contributions are withheld at source by the employer. Employer PRSI contributions apply at rates up to 11.25% (increased from 11.15% since 1 October 2025), and these are an allowable deduction for corporation tax purposes. Further rate increases of 0.15% are scheduled to take effect in both 2026 (from 1 October 2026) and 2027 and an increase of 0.20% in 2028.

Levies on insurance policies

• A levy of 3% of gross premiums received by insurers applies in respect of non-life insurance policies relating to risks located in Ireland.
• An additional contribution of 1% (reduced from 2% with effect from 1 January 2026) to the Insurance Compensation Fund applies to premiums received in relation to non-life insurance policies. Similar to the 3% non-life insurance levy, the contribution applies where premiums are received in respect of risks located in Ireland. 
• A levy of 1% of gross premiums received by insurers applies in relation to certain classes of life insurance policies relating to risks located in Ireland. 

Each of the above amounts is payable four times per annum, within 25 days of the end of each quarter (i.e. within 25 days from quarters ending 31 March, 30 June, 30 September, and 31 December).

Reinsurance business is excluded the above levies.

There is also a stamp duty liability of EUR 1 on each new non-life insurance policy where the risk is located in Ireland.

Certain voluntary health insurance policies are subject to risk equalisation fixed levies. Risk equalisation is a process that aims to equitably neutralise differences in insurers’ costs that arise due to variations in the age profile of the insured. The levies are updated regularly and currently range from EUR 31 to EUR 469 per policy, depending on the age profile of the insured and the type of coverage. These levies will be increased to range from EUR 34 to EUR 517 from 1 April 2026.

Environmental taxes

In Ireland, a levy of 22 cents per bag is imposed upon consumers provided with a plastic bag when purchasing goods in supermarkets and other retail outlets. Under the applicable legislation, retailers are obligated to collect 22 cents in respect of every plastic bag or bag containing plastic, regardless of size, unless specifically exempted, that is provided to customers and remit all plastic bag levies collected to Irish Revenue. As a result of the levy, most non-supermarket retailers provide paper carrier bags, and same retailers sell ‘bags for life’, which are made from non-plastic material and, therefore, not subject to the environmental levy.

On 1 February 2024, Ireland introduced a deposit return scheme. Under the scheme, when a customer purchases a plastic bottle or aluminium or steel can that features the return log, the customer pays a deposit of between 15 cent and 25 cent in addition to the price of the drink. When that empty, undamaged container is returned to any retail outlet, the customer will be refunded the deposit in full. The deposit payable depends on the size of the container.

Carbon tax

Finance Act 2025 provided for a carbon tax increase of EUR 7.50, up from EUR 63.50 to EUR 71, per tonne of carbon dioxide emitted. A carbon tax is levied on mineral oils (e.g. auto fuels, kerosene) that are supplied in Ireland. The rate of carbon tax on oil and gas broadly equates to EUR 71 per tonne of CO2 emitted from 8 October 2025 for auto fuels and from 1 May 2026 for all other fuels, and the government has committed to increasing this to EUR 100 by 2030. Relief applies where mineral oils are supplied to an Emissions Trading Scheme (ETS) installation, to combined heat and power plants, or used for electricity generation. Pure biofuels are exempt from carbon tax. Where biofuel has been mixed or blended with any other mineral oil, the relief from carbon taxes shall apply to the biofuel content of the mixture or blend, regardless of the percentage.

A carbon tax is also levied on natural gas and solid fuel where supplied for combustion. Again, reliefs apply where these fuels are supplied to ETS installations or used in electricity generation, chemical reduction, or in the electrolytic or metallurgical processes.

Exit tax

The exit tax was substantially amended in 2018 in order to company with the EU’s Anti-Tax Avoidance Directives (ATAD); its purpose is to prevent companies from removing assets from the Irish tax net without triggering a liability to Irish tax on any latent gain on those assets.

The exit tax applies:

• where a company transfers assets from its Irish PE to its head office or another PE in another jurisdiction;
• where a company transfers the business carried on by its Irish PE to another jurisdiction; or
• where an Irish-resident company transfers its tax residence to another jurisdiction.

The exit tax deems the migrated assets to have been disposed of and immediately re-acquired at their market value. Any deemed gain arising from this deemed disposal will be liable to Irish corporation tax at 12.5%. However, there are anti-avoidance provisions which can increase the tax rate to 33% if it is determined that the transaction giving rise to the deemed disposal is an artificial transaction designed to access the lower 12.5% rate, rather than the 33% capital gains tax rate.

Exemption from the charge to exit tax may be available in respect of a range of assets, subject to certain conditions being met. These include assets that will remain within the Irish tax net post-migration, e.g. assets that are used in an Irish trade post-migration and certain “specified assets” (as defined for capital gains tax purposes – see Capital Gains Tax section below).

Companies have the right, in certain circumstances, to pay the exit tax in equal annual instalments over five years. Interest applies over the period of deferral. 

Local taxes

Local taxes, known as ‘rates’, are not based on income but rather are levied on the occupiers of business property by reference to a deemed rental value of the property concerned. The level of rates levied can depend on the region in which the property is located. Rates are an allowable deduction for corporation tax purposes.

Local authorities are also empowered to levy charges on all occupiers for specific services (e.g. water supply). These charges are deductible for corporation tax purposes.