Ireland

Irish Finance Act 2025

Following the most recent Irish Finance Act (effective from 1 January 2026):

• • Special Assignee Relief Programme (SARP) has been renewed for a further 5 years, with an increase to the minimum income threshold to €125,000 from 2026.  Simplifications in administration has also been provided. 
  • Foreign Earnings Deduction (FED) relief has been increased to €50,000 from 2026, extended for a further 5 years and scope has widened to include the Philippines and Turkey.   
  • Company Car BIK: the current €10,000 company vehicle OMV deduction has been extended by 1 year into 2026. It will then reduce to €5,000 in 2027 and €2,500 in 2028, being abolished from 2029. A new vehicle category for zero emission cars will apply with BIK rates of between 6% - 15% from 2026. The threshold for entering the highest mileage band (where a lower BIK rate applies), has been permanently reduced from 52,001km to 48,001km from 1 January 2026.  
  • There is an increase to minimum wage, adding €0.65 cents per hour to bring it to €14.15 per hour.  
  • Changes in the USC bands, increasing the ceiling of the 2% rate by €1,318 to €28,700. The USC concession for individuals with a full medical card and income of less than €60,000 has been extended to 2027.    
  • The Rent Tax Credit has been extended for 3 years to the end of 2028. The credit remains unchanged at up to €1,000 per person.    
  • Mortgage Interest relief was extended for a further two years (2025 and 2026) - with a reduced value applying in the final year (2026).   
  • Auto‑enrolment to a mandatory pension regime is introduced with effect from 1 January 2026 for eligible employees. Individuals who are members of an occupational pension plan or Personal Retirement Saving Account may be exempt from this requirement if the relevant arrangement meets an equvilance test.