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September 15, 2023

Irish Government publishes roadmap for introducing dividend participation exemption to Ireland's corporation tax system

  • Ireland's Department of Finance (the Department) has confirmed the introduction of a participation exemption for foreign-sourced dividends to take effect at the beginning of 2025.
  • The Department has advised that further analysis will be completed on the possible introduction of a foreign branch exemption.
  • The roadmap published sets out a series of milestones with the first phase of consultation launched on 14 September.
  • The detailed technical consultation contains more than 50 specific questions related to the design of the exemption.
  • Stakeholders are invited to provide responses to the technical questions presented. The consultation period runs to the close of business on 13 December 2023.


On 14 September 2023, Ireland's Department of Finance (the Department) published a roadmap outlining a project plan for introducing a dividend participation exemption to the Irish corporation tax system.

The expectation is that legislation implementing this regime will be introduced in Autumn 2024 and will take effect in 2025.

The consultation process is expected to deliver draft legislation before the end of March 2024.

The Department is continuing to evaluate the competitiveness and policy considerations associated with the introduction of a foreign branch exemption. The consultation raises a series of questions in that regard, including possible sectoral impacts.

Detailed Discussion

In his foreword to the roadmap, the Minister for Finance, Michael McGrath, (the Minister) reaffirmed the Irish Government's commitment to maintaining a stable and competitive corporation tax system, saying:

"Ireland is fully committed to ensuring that our corporation tax code is competitive and attractive to business investment, while also maintaining consistency with international best practices.

As a small, open economy, integrated with global markets, our tax system must also be stable, competitive and in line with agreed international standards. This provides a supportive environment for businesses to invest, creating economic activity and employment and generating tax revenues for the State."

An initial consultation on a territorial system of taxation was launched in December 2021.1 Following a detailed review of the various submissions2 received in response to that consultation, the Minister has decided to progress the development of a dividend participation exemption with a view to introducing relevant legislation in Finance Bill 2024. This roadmap represents the first step in this implementation process.

The roadmap includes a project timeline for the consultation process as follows:



Publication of project roadmap, including detailed consultation on introduction of a participation exemption(s) to the Irish corporation tax system

September 2023

Close consultation and consider responses

13 December 2023

Consideration of responses and further stakeholder engagement

December 2023 — March 2024

Feedback Statement 1 (Dividend Exemption)

End March 2024

Feedback Statement 2 (Dividend Exemption) — if required

Circa July 2024

Finance Bill 2024 — Legislate for dividend exemption to take effect from 2025

October — December 2024

The roadmap includes a technical consultation and invites stakeholders to respond to a series of questions around the design of a dividend participation regime. These questions are divided into four main areas:

  1. Structural considerations (e.g., optionality with existing "tax plus credit" regime)
  2. Consequential impacts (e.g., alignment with existing reliefs for foreign subsidiaries)
  3. Anti-avoidance rules (e.g., potential modification of Ireland's anti-hybrid provisions)
  4. Any other issues that should be considered in the design of a participation for foreign dividends

The Minister has committed to a further-detailed examination of the potential benefits and policy considerations associated with introducing a foreign branch participation exemption to the Irish tax system. Stakeholders have been invited to provide responses to general technical questions in this regard.

Next steps

EY welcomes the publication of this roadmap and will continue to engage with the Irish Government and other stakeholders during the consultation and implementation process

We look forward to assisting clients in evaluating perspectives and responses to the roadmap ahead of the 13 December deadline.


For additional information with respect to this Alert, please contact the following:

Ernst & Young (Ireland), Dublin

Ernst & Young (Ireland), Financial Services, Dublin

Ernst & Young (Ireland), Cork

Ernst & Young (Ireland), Limerick

Ernst & Young (Ireland), Waterford

Ernst & Young (Ireland), Galway

Ernst & Young LLP (United States), Irish Tax Desk, New York

Ernst & Young LLP (United States), Irish Tax Desk, San Jose

Published by NTD’s Tax Technical Knowledge Services group; Carolyn Wright, legal editor



1 Consultation on the Territorial System of Taxation, December 2021, Irish Department of Finance.

2 EY Ireland Response to December 2021 Consultation, dated 7 March 2023.