A New Year, New Rules: Key Budgetary Changes for Irish Businesses in 2025
As we step into a new year, it’s essential for Irish businesses to stay informed about the significant budgetary changes coming into effect in 2025. These updates have been designed to stimulate innovation, support entrepreneurship, and address challenges in sectors like housing and creative industries.
Here’s an overview of the key changes shaping the business landscape for the year ahead, along with insights into how your business can adapt and thrive under the new rules.
Research and Development (R&D) Tax Credit
Increased Threshold: The first-year payment threshold for the R&D tax credit has been raised from €50,000 to €75,000. This enhancement offers increased cash flow support for businesses investing in R&D, encouraging innovation and technological growth.
Comprehensive Review: A detailed review of the R&D tax credit scheme is planned to ensure it continues to drive innovation and fosters a competitive business environment in Ireland.
Tax Incentives and Reliefs
Small Benefit Exemption Expansion: The tax-free annual limit for small benefits has increased from €1,000 to €1,500. Employers can now offer more generous non-cash benefits—like gift cards or vouchers—without tax liabilities.
Unscripted Production Tax Credit: A new 20% tax credit is available for qualifying expenditure up to €15 million in the unscripted production sector. This initiative is expected to boost Ireland’s creative industries and attract international productions.
Film Tax Credit Enhancement: Section 481 film tax credit relief has been increased by 8% for productions with a maximum qualifying expenditure of €20 million, strengthening Ireland’s appeal as a global film production hub.
Extension of Investment Incentives: Employment Investment Incentive (EII), Start-Up Relief for Entrepreneurs, and Start-Up Capital Incentive schemes have been extended to the end of 2026. These extensions provide significant tax relief to investors and entrepreneurs, fostering economic growth and innovation.
Retirement Relief and Angel Investor Tax Relief: Revisions to retirement relief and angel investor tax relief aim to promote wealth transfer and encourage investments in innovative businesses.
Property Taxes and Other Measures
Stamp Duty Increases: Stamp duty rates on residential properties valued over €1.5 million have risen to address housing market concerns and ensure equitable taxation.
Residential Land Zoned Tax: A new tax on lands zoned for residential development has been introduced. However, exemptions and deferrals are available to mitigate the impact on landowners.
Participation and Branch Exemptions: The government is considering extending participation exemptions to foreign dividends and introducing branch exemptions. These changes aim to simplify tax treatments for multinational businesses operating in Ireland.
Stay Informed
For additional updates on personal taxation changes, we encourage you to read our related blog: 2025 Tax Year: A Breakdown of Key Changes for Employers.
Understanding and adapting to these budgetary changes is crucial for businesses aiming to stay competitive and compliant in 2025. Whether it’s leveraging tax incentives, revising benefits policies, or planning for property tax changes, now is the time to align your business strategy with the evolving regulatory landscape.
For tailored guidance on how these changes may impact your business, feel free to contact us.