Budget 2022

Budget 2022 was announced on 12 October 2021. This was Minister Donohoe’s fifth budget speech and the second of the coalition government between Fianna Fáil, Fine Gael and the Green Party. Last year’s budget was the biggest in Irish history and was framed against the backdrop of the adverse economic effects of COVID-19 and a hard Brexit. This year, the Minister is grappling with other challenges such as an under supply of affordable housing, a rise in the cost of living, and also trying to best position Ireland for the anticipated post-COVID 19 economic bounce.

Following the recent release of better than expected economic forecasts for Ireland a range of tax and expenditure measures worth EUR4.7bn were announced.  Budget 2022 measures include capital expenditure of EUR4.2bn, tax-relieving measures of EUR500m and revenue-raising measures of EUR230m.

On the international tax front, after getting assurances concerning the proposed minimum global tax rate, Ireland has signed up to the OECD Pillar One and Pillar Two commitments, supporting a minimum global tax rate of 15%. The Minister used his budget speech to reinforce the message that it was in the national interest to join the agreement and, while recognising that there will be a cost to the exchequer, he noted that it provides long-term certainty for businesses and investors. It is expected that the global minimum rate will not be introduced until 2023.  Importantly, the Minister confirmed that Ireland’s 12.5% corporation tax rate for trading profits will continue to apply to companies with annual turnovers not exceeding EUR750m.  

Full details of all budgetary measures including Ireland’s new interest limitation and anti-reverse hybrid rules, the new tax credit for digital gaming and the zoned land tax will be set out in the Finance Bill which is expected to be published on 21 October 2021. As usual, on tax matters, the devil will be in the detail!

Please click on the links below for the key measures of Budget 2022 from a tax perspective:

 

 

There are no news related to this area

View all

Key Contacts

Sonya Manzor Partner

Brian Duffy Partner