Ireland has enjoyed a high degree of economic success in recent years. However, the business environment both at home and abroad is subject to constant change. So how best to secure our economic future?
Our pre-Budget submission sets out a range of tax policy proposals we believe will support a dynamic economy with an emphasis on maintaining our appeal for FDI and encouraging domestic entrepreneurship.
Tackling growing tax complexity
KPMG’s pre-Budget 2025 submission calls for the setting up of an Office for Tax Simplification to address the excessive complexity that has become a feature of the tax system in recent years. Complexity is adding to the cost of doing business and is undermining competitiveness, particularly now that the 12.5% corporation tax rate is less of a competitive advantage.
Pictured at the roundtable discussion with senior leaders and founders of companies from a cross-section of the economy to discuss our pre-budget submission. (l-r) Olivia Lynch, Tax Partner, KPMG, Minister for Finance Michael McGrath, T.D., and Tom Woods, Head of Tax, KPMG.
A focus on competitiveness challenges
“Budget 2025 needs to focus on the key competitiveness challenges facing the Irish economy, including the cost of employment, the international competition for talent, affordable housing, the need to develop more Irish businesses of international scale and climate change commitments”, said Tom Woods, Head of Tax, KPMG.
“A key objective should be to build on Ireland’s extraordinary FDI success,” said Tom Woods, “As countries implement the OECD BEPS 2.0 Pillar Two Rules, it’s critical that Ireland differentiates itself from its competitors by enhancing its value offerings to businesses and individuals. There is also a greater imperative to fast-track the upscaling of domestic businesses to sustain future tax yields.”
Budget 2025 needs to focus on the key competitiveness challenges facing the Irish economy.
Key recommendations
Reduce the cost of employment
Increase the entry point to the marginal income tax rate and cap the amount of income subject to PRSI
Incentives for employer developed accommodation
Incentivise employers to develop employee accommodation and allow a corresponding BIK exemption where the employee earns less than €50,000
Stimulate investment in SMEs
Individuals should be encouraged to put some of their savings to productive use, helping SMEs to finance growth, innovation and the creation of new employment opportunities
Re-introduce “Section 23” relief
A controlled and targeted relief would encourage conversion of commercial properties for residential use and encourage individuals to finance the development of new residential units for letting
Green technology
Incentivise the development and use of green technology
Tax simplification
Establish an Office of Tax Simplification to advise on reform of complex tax law
Abandon the cap on retirement relief
The planned introduction of the €10 million cap on retirement relief next year should be cancelled or paused and given further detailed consideration and analysis
Download our submission in full
Get in touch
The measures unveiled in the forthcoming Budget 2025 will have far-reaching implications for businesses across Ireland. If you have any inquiries, comments, or wish to explore further, we are here to assist.
Feel free to get in touch with Tom Woods, our Head of Tax - we'd be delighted to hear from you.
Tom Woods
Head of Tax
KPMG in Ireland
