Ireland

Pillar Two

Finance Act 2024 introduced updates to the Irish Pillar Two rules. The updates mainly relate to the Pillar Two Global Anti-Base Erosion (GloBE) Administrative Guidance that was released on 18 December 2023 and the Pillar Two GloBE Administrative Guidance that was released on 17 June 2024. The updates also include clarification on the operation of certain aspects of the Domestic Top-up Tax calculation.

Participation exemption for foreign distributions

Finance Act 2024 introduced the participation exemption for certain foreign distributions, exempting certain income receipts from share capital. It applies to dividends or other distributions received from ‘relevant territory’ resident companies from 1 January 2025 onwards. A ‘relevant territory’ includes European Economic Area (EEA) and tax treaty territories as well as territories where a tax treaty with Ireland has been made but is not yet in force. See Participation exemption for foreign distributions in the Income determination section for further details.