As Ireland assumes the Presidency of the Council of the European Union, KPMG Tax sets out how a clear, stable and forward-looking tax policy agenda can support competitiveness, innovation, domestic investment and the green transition, helping Ireland contribute meaningfully to Europe’s next phase of growth.
Ireland’s EU Presidency: shaping a competitive, innovative and resilient Europe
Ireland’s Presidency of the Council of the European Union comes at a defining point for Europe. The global environment is uncertain, business costs remain elevated, regulatory complexity is increasing, and international tax reform continues to reshape how investment decisions are made.
At the same time, Europe is focused on renewing its competitiveness, accelerating innovation, supporting the green transition and strengthening economic resilience.
For Ireland, this is more than a diplomatic milestone. It is an opportunity to help shape an EU policy agenda that supports growth, investment and long-term prosperity. As a small, open and highly trade-dependent economy, Ireland has a particular interest in a Europe that is competitive, predictable and capable of supporting businesses of all sizes.
KPMG’s Pre-Budget 2027 submission sets out a practical tax policy framework that speaks directly to this agenda: reducing complexity, supporting innovation, mobilising domestic capital, encouraging entrepreneurship and accelerating sustainable investment. These are not only national priorities, they are also central to Europe’s wider competitiveness challenge.
Why tax policy matters to Ireland’s EU Presidency agenda
Ireland’s Presidency will be framed by the themes of competitiveness, values and security. Competitiveness is especially relevant to the business community: Europe must remain an attractive place to invest, grow, innovate and create high-quality employment.
Tax policy has a central role in strengthening competitiveness: as Pillar Two reduces the significance of headline rates, businesses increasingly value certainty, simplicity, efficient administration and targeted incentives that support real economic activity.
Ireland can use its EU Presidency to advance this agenda by simplifying tax administration, supporting digital and green transformation, encouraging domestic investment, and creating the conditions for entrepreneurs and scaling businesses to succeed.
Supporting European competitiveness through simplification
A more competitive Europe needs a simpler and more predictable regulatory and tax environment. Complexity creates cost, slows investment decisions and places a disproportionate burden on SMEs and scaling businesses.
KPMG’s Pre-Budget 2027 submission recommends practical measures to reduce complexity and administrative cost for business, including simplifying Ireland’s tax code and filing obligations, reforming the taxation of interest, streamlining corporation tax and VAT returns, and moving towards a territorial regime for branch profits.
These proposals support the wider European goal of reducing unnecessary administrative burden and reinforce simplification as a competitiveness priority, enabling businesses to focus more resources on investment, innovation, productivity and growth.
Positioning Ireland as an innovation hub
Innovation is central to Europe’s long-term productivity and resilience. Ireland already has strong foundations, but the global environment is shifting quickly.
The implementation of Pillar Two, the acceleration of digital transformation and the growing importance of climate technologies mean that Ireland must continue to evolve its innovation offering.
KPMG recommends a practical innovation agenda that makes it easier for businesses to invest in digital transformation, R&D and green technologies.
Key measures include introducing a Digital Transformation Tax Incentive, simplifying and enhancing the R&D Tax Credit, improving SME access, reforming the Knowledge Development Box and increasing the R&D Tax Credit to 50% for green technology development.
This would support two Presidency priorities: improving European productivity and ensuring innovation benefits domestic enterprises and SMEs, not just large multinationals.
Unlocking domestic capital for productive investment
A competitive Europe also needs deeper pools of productive capital. KPMG’s submission identifies a significant opportunity to mobilise household savings and direct more domestic capital towards businesses, infrastructure and capital markets.
KPMG recommends the introduction of a simple, tax-efficient Savings and Investment Account to help households achieve better long-term returns while channelling domestic savings into productive investment across the Irish economy.
This recommendation is especially relevant in the context of the EU’s wider savings and investment agenda. A stronger domestic investment culture would support entrepreneurship, innovation and growth, while helping households access a broader range of long-term investment opportunities.
Backing entrepreneurship and scaling businesses
Foreign direct investment has been central to Ireland’s success, but long-term resilience also depends on a stronger base of indigenous businesses that can start, scale and compete internationally.
KPMG recommends reducing CGT and CAT rates to 20% and simplifying enterprise supports to encourage entrepreneurship, reinvestment, housing supply and business succession.
Key measures include improving SME investment reliefs, enhancing entrepreneur relief, extending and simplifying the Employment Investment Incentive Scheme, and reducing friction for growing and transitioning businesses.
These measures speak directly to Europe’s competitiveness challenge by making it easier for ambitious businesses to attract capital, reward risk-taking, scale internationally and retain talent.
Ireland’s Presidency provides a valuable platform to champion policies that help entrepreneurs and SMEs contribute more strongly to productivity, employment and regional growth.
Accelerating the green transition through tax policy
Europe’s green transition is both an environmental imperative and an economic opportunity. It requires investment in innovation, infrastructure, renewable energy, energy efficiency and sustainable business models.
KPMG recommends a targeted green tax agenda to accelerate sustainable investment, including a Green Transition Tax Incentive, a 50% R&D Tax Credit for green technology development, tax relief for qualifying green projects, infrastructure investment incentives, green bonds and enhanced investor reliefs for green economy enterprises.
These proposals support the Presidency’s focus on competitiveness and security by connecting energy resilience, climate innovation and investment certainty.
A tax system that encourages sustainable investment can help businesses decarbonise while strengthening Ireland’s attractiveness as a location for future-focused growth.
Read the full Pre-Budget 2027 submission
Explore KPMG’s Pre-Budget 2027 tax policy recommendations and our latest insights on competitiveness, innovation and sustainable growth.
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