On 8 May 2024, Matheson made a submission responding to a public consultation on the design of an Irish participation exemption. Matheson considers an Irish participation exemption for foreign dividends is long overdue and welcomes the proposal to update Irish tax law in this respect.
However, there were some aspects of the design of the participation exemption proposed by the Department of Finance in the public consultation document (Participation Exemption for Foreign Dividends Feedback Statement: Strawman Proposal) that should be reconsidered. In our submission, we focussed on two aspects of the design that we believe are most in need of revision:
- The geographic scope – under the proposal included in the public consultation document, the exemption would be limited to dividends received from companies resident in EU, EEA and treaty partner jurisdictions. We believe that scope is too narrow and that the exemption should be available in respect of dividends received from a much broader range of countries.
- The commencement provisions – under the proposal included in the public consultation document the exemption would apply to dividends received by companies with accounting periods beginning on or after 1 January 2025. We think this approach is inappropriate and that the exemption should apply to all dividends received on or after 1 January 2025, regardless of accounting periods.
Our full submission is available here.
The Department of Finance has confirmed that once they have had an opportunity to reflect on the submissions received, they will issue a further consultation document which is expected to include draft legislation. That document is expected during the summer months.
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