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Today’s Essential Updates for Irish Accountants and Tax Professionals

This daily briefing covers the most significant regulatory, compliance, and policy developments affecting Irish accountants. From critical Revenue deadlines to international tax framework changes, here’s what you need to know.

Urgent: Karshan Payroll Settlement Deadline

Revenue’s disclosure opportunity for businesses affected by the Supreme Court decision in The Revenue Commissioners v Karshan (Midlands) Ltd t/a Domino’s Pizza closed on 30 January 2026. This landmark case clarified employment status assessment under Irish tax law.

Key settlement terms included:

• Income tax calculated at 20% of gross payments
• USC calculated at 3.5% of gross payments
• PRSI at normal rates
• No interest or penalties for qualifying disclosures

Revenue has confirmed flexibility for businesses that submitted disclosures by the deadline but need to make amendments – these will still qualify under the Code of Practice for Revenue Compliance Interventions, provided amendments are submitted as soon as practically possible.

Electronic Withholding Tax (eWHT) Consultation Closes

The public consultation on modernising Ireland’s withholding tax system also closed on 30 January 2026. This represents a fundamental shift in how taxation operates for self-employed individuals, corporations, and partnerships.

What eWHT proposes:

• Extending PAYE modernisation principles to other taxpayer categories
• Real-time reporting embedded in normal business systems
• Reduced compliance costs through digitalisation
• Seamless collection of tax at source for self-employed workers

This would significantly simplify compliance for self-employed workers who currently face complex pay-and-file processes with lump sum payments.

Revenue eBrief Updates

Recent Revenue guidance releases:

• eBrief No. 023/26 (28 January): Main Purpose Tests – guidance on anti-hybrid rules and the ‘Reasonable to Consider’ test, with amendments to Tax and Duty Manual Part 33-01-01
• eBrief No. 018/26 (27 January): Agent’s Guide to the Collector-General’s Division – updated procedures for agents engaging with debt collection and payment arrangements
• eBrief No. 022/26: Accelerated capital allowances for slurry storage facilities
• eBrief No. 021/26: Exemption for profits from musical instrument production
• eBrief No. 020/26: Exemption for profits from microgeneration of electricity
• eBrief No. 019/26: Amendment to exempt unit trusts

Storm Chandra: Revenue Response

Revenue has acknowledged the difficulties caused by Storm Chandra, which brought severe flooding across parts of Ireland. Accountants assisting affected clients should engage with Revenue to discuss appropriate accommodations for missed deadlines or reporting requirements where the storm directly caused non-compliance.

Budget 2026 Tax Changes Now in Effect

Several Budget 2026 measures took effect on 1 January 2026:

USC Changes

• 2% USC rate band ceiling increased to €28,700
• National minimum wage increased to €14.15 per hour
• Reduced USC rate for medical card holders (income <€60,000) extended to end of 2027

Property & Housing

• Rent Tax Credit: Extended to 2026-2028; €1,000 for single persons, €2,000 for couples
• Mortgage Interest Relief: Extended on tapered basis to December 2027; max credit €1,250 (2025) and €625 (2026)

Vehicle Taxation

• New BIK tables with category A1 for zero-emission vehicles
• Reduced BIK rates for EVs: 6-15% depending on business mileage
• VRT relief for EVs extended to December 2026

Auto-Enrolment Pension System (MyFutureFund)

The auto-enrolment retirement savings scheme commenced on 1 January 2026. Eligible employees (aged 23-60, earning >€20,000, not already in a payroll pension) are automatically enrolled.

Employer obligations:

• Automatically enrol eligible employees
• Deduct employee pension contributions through payroll
• Make matching employer contributions (starting at 1.5% of gross pay)
• Communicate clearly about enrolment and opt-out options

The system uses Revenue payroll data to identify eligible employees – ensure payroll records are accurate and up to date.

International Tax: OECD Pillar Two ‘Side-by-Side’ System

The OECD published significant guidance on 5 January 2026 regarding the Pillar Two global minimum tax rules:

• New permanent simplified ETR safe harbour for MNE groups with UPE in qualifying jurisdictions
• US confirmed as eligible jurisdiction for the side-by-side safe harbour
• Effective for fiscal years commencing on or after 1 January 2026
• Updated Global Information Return expected by June 2026

MNE groups should evaluate how these elections could impact their Pillar Two profile and compliance simplifications.

Transfer Pricing Updates

OECD Country Profiles (22 January 2026): Updated profiles published for Bosnia and Herzegovina, Brazil, Costa Rica, Croatia, Greece, Iceland, Korea, and Norway.

EU Transfer Pricing Directive: The Commission’s proposal has been withdrawn from the 2026 Work Programme. A new EU Transfer Pricing Platform may be established for consensus-based, non-legally binding solutions.

VAT Developments

VAT Group Rule Changes

Revenue updated guidance on Irish VAT groups to align with EU case law:

• VAT groups now only apply to Irish establishments
• Foreign establishments of the same entity no longer included
• Supplies between Irish VAT groups and non-Irish establishments are now within VAT scope
• Transitional period for existing groups: Until 31 December 2026

This may result in additional VAT costs for partially exempt businesses (banks, insurers, asset managers).

VAT in the Digital Age (ViDA)

Mandatory B2B e-invoicing rollout:

• Large corporates: November 2028
• General VAT-registered businesses: November 2029
• EU cross-border deadline: July 2030

VAT Rate Changes

• 9% VAT rate on electricity/gas extended to December 2030
• Restaurant, café, take-away, and hairdressing: Reduced to 9% from 1 July 2026

EU Carbon Border Adjustment Mechanism (CBAM)

CBAM entered its definitive phase on 1 January 2026. Importers of CBAM goods (cement, iron/steel, aluminium, fertilisers, electricity, hydrogen) exceeding 50 tonnes now require a CBAM account number. Over 4,100 operators obtained authorised declarant status ahead of implementation.

Enterprise Tax Measures Extended

• KEEP: Extended to December 2028 (subject to EU approval)
• Revised Entrepreneur Relief: Lifetime limit increased from €1m to €1.5m (10% CGT rate)
• SARP: Extended to December 2030; income limit increased to €125,000
• R&D Tax Credit: Increased from 30% to 35%; first-year threshold up to €87,500
• Digital Games Credit: Extended to December 2031

Financial Services Sector

• Tax rates on Irish regulated funds/life policies reduced from 41% to 38%
• Participation exemption for foreign dividends expanded (geographic scope, reduced residency period)
• Public consultation on IREF regime simplification (not entity-level tax)

Key Deadlines This Week

Action Items for Accountants

1. Confirm client compliance with January 30 deadlines; assess need for amendments to Karshan disclosures
2. Update payroll systems for Budget 2026 measures and auto-enrolment
3. Review VAT group structures in light of Revenue’s updated guidance
4. Assess Pillar Two positioning for multinational clients following side-by-side system publication
5. Prepare for ViDA implementation – begin planning e-invoicing system upgrades
6. Engage with Revenue for Storm Chandra-affected clients needing deadline extensions

This briefing is compiled daily from Revenue.ie, Chartered Accountants Ireland, Irish Tax Institute, Department of Finance, Central Bank of Ireland, Irish business media, EU directives, OECD updates, and Big 4 Ireland publications. For professional advice on any matter covered, please contact our team.

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