Financial Services

Key measures for financial services

Several significant tax policy changes have been announced in Budget 2027 aimed at enhancing Ireland's financial services sector and fostering a stronger retail investment culture.

The Irish Investment Account represents the Government's flagship measure which will aim to mobilise domestic savings and shift Irish savers from low-yield deposits to investment products. Some of the features announced in the regime include a tax-free threshold of €50,000, 1% tax on balances over the €50,000 threshold and an annual max contribution limit of €12,000.

Further, no Capital Gains Tax, deemed disposal rules or Dividend Withholding Tax will apply to the investment account which will be launched on 1 July 2027. To reduce complexity, Minister Simon Harris announced that holders of the Irish Investment Account will not be required to engaged with Irish Revenue when it comes to the administration of any applicable taxes on the savings account, rather this responsibility will sit with the provider.

Further key measures include the reduction in the rate of Capital Gains tax from 33% to 31%, and a further reduction of Investment Undertaking Tax (IUT) and Life Assurance Exit Tax (LAET) from 38% to 35%, which was previously reduced from 41% to 38% in last year’s Finance Bill.

In what will be of particular interest to various stakeholders in the ever-booming aviation industry in Ireland, the Government intends to commence a public consultation on Sustainable Aviation Fuel (“SAF”) to identify barriers to SAF production and investment.

The extension of the Bank Levy for a further year maintains a tax cost for affected banks, with a target yield of €200 million for the Exchequer.

The eight-year deemed disposal on funds was expected to be removed but the Minister has included this as a future consideration as part of the simplification on the taxation of investments.

Further announcements of note included the inclusion of targeted amendments in the upcoming Finance Bill to simplify the rules on interest relief for borrowings used in certain lending and investment activities, with acknowledgement that the review of Ireland’s interest regime continues. The preliminary corporation tax rules will also be amended to increase the threshold below which a company is treated as a small company for preliminary tax purposes, as well as other favourable measures.

Who will be affected and when?

The retail investment measures announced in Budget 2027 will have a significant positive impact on individual investors and investment providers. The measures announced in the upcoming Finance Bill relating to interest relief will also be of particular interest to the financial services industry as a whole, depending on the extent of those measures.

What now?

Legislative measures are expected to be included in Finance Bill 2027, and many will be effective from 1 January 2027.

The Irish Investment Account will be launched on 1 July 2027. Financial services firms should begin assessing operational readiness for implementation of the Irish Investment Account from 1 July 2027.

As the government announces simplification measures to the interest regime in the Finance Bill and future simplification of the taxation of investments more broadly, taxpayers should continue to engage in this reform as and when the opportunity arises.

Deloitte's view on Budget 2027 measures

The introduction of the Irish Investment Account in Budget 2027 represents a transformational opportunity to shift Irish savings and investment behaviour and create substantial new market opportunities for the sector.

The reduction in CGT, IUT and LAET are welcome measures and demonstrate the Government's commitment to maintaining Ireland's position as a leading global funds hub.

Key measures still to be announced such as the interest regime reform and the simplification of the taxation of investments should be closely monitored. The financial services sector should be well-positioned for growth in 2027 and beyond, provided the stakeholders engage proactively in upcoming consultations and the promised reform in the Finance Bill is enacted into legislation.

On aviation more broadly, it will be important that the aviation industry stakeholders engage proactively with the upcoming consultation on Sustainable Aviation Fuel.

Deloitte will engage in each of these public consultations with recommendations for key changes that we believe should be addressed to provide greater opportunity, clarity and simplicity for taxpayers and stakeholders.