Every October, Ireland's tax story happens in two acts. First comes Budget Day, with its speeches, headline numbers and instant reaction. Then, a couple of weeks later and with far less noise, comes the Finance Bill — the document that turns those announcements into law. That second act arrived on Monday, 19 October, when the Government published the Finance (No. 2) Bill 2026. It runs to 79 sections and roughly 242 pages, and it gives legal effect to the tax measures announced by Tánaiste and Minister for Finance Simon Harris in Budget 2027.
The name can be confusing. The Bill is called "2026" because it is passed in 2026, but it delivers the Budget 2027 package that applies mostly from next January. For workers, the headline is more money in take-home pay. For business owners, it is a long list of practical changes — on capital gains, research and development, investment and reporting — that are worth understanding now rather than discovering in the new year.
More in Your Pocket: The Income Tax and USC Changes
The centrepiece is the personal tax package. The standard rate cut-off point for a single person rises by €2,500 to €46,500, meaning more of every worker's income is taxed at 20% before the 40% higher rate kicks in. The main personal tax credits each rise by €125 to €2,125. Together with the USC changes, the Department of Finance estimates the package will cost €1.3 billion in 2027 and €1.5 billion in a full year — money that stays with households instead of going to the Exchequer.
On USC, the ceiling of the 2% rate band rises from €28,700 to €30,300. That may look like a small technical shift, but it matters for lower and middle earners. As the minimum wage rises and pay settlements come through, it helps make sure those gains are not quietly eaten by a higher USC rate. In simple terms, a single worker earning above €46,500 gains up to €500 a year from the wider standard band alone, before adding the higher credits and the USC change. Your own figure depends on your income and circumstances, but almost everyone on a payroll should see a modest lift from January.
The Bill also increases several reliefs that touch everyday life. The Rent Tax Credit goes up, as does Help to Buy for first-time buyers and the relief linked to childcare services. For employers, that matters too: when staff feel their pay is stretching further, pressure on wage negotiations can ease a little.
Capital Gains Tax Falls to 31%
One of the most significant changes for business owners and investors is a two-point cut in capital gains tax, from 33% to 31%, for disposals made from 7 October 2026. For anyone thinking about selling shares, property or part of a business, that is a real difference on the final bill. On a €200,000 gain, it works out at €4,000 less tax.
Alongside this, the tax-free thresholds for Capital Acquisitions Tax — the tax on gifts and inheritances — are increased. Advisers at KPMG describe a set of targeted corporation tax, CGT and CAT measures designed to ease cash flow, investment and succession pressures for private Irish businesses. For family firms planning to pass the business to the next generation, this is a good moment to review succession plans with an adviser while the new rules are fresh.
Backing Innovation: R&D and the Knowledge Development Box
For companies that develop new products, processes or software, the Bill brings welcome news. It enhances the Research and Development Tax Credit, including higher thresholds, which means more businesses can get more of their credit back sooner. For a growing SME with a small development team, faster access to that cash can make a real difference to hiring plans.
The Knowledge Development Box — Ireland's regime for profits earned from patented inventions and qualifying intellectual property — is extended to 2032, according to analysis from Deloitte. The Bill also gives companies a time-limited window to opt out of the regime for existing assets where it no longer suits them. That combination of certainty and flexibility is exactly what innovative firms ask for when planning long-term investment.
There is support on the land too. Accelerated capital allowances for farm safety equipment are expanded, and the farmer's flat rate of VAT rises. For the agri-food businesses that underpin so much of rural Ireland, these are practical, positive steps.
A Simpler Way to Invest: The New Investment Account
Perhaps the most talked-about new measure is the Investment Account, which will be available from 1 July 2027. It follows a roadmap called "Taxation of Retail Investment – A New Path Forward for Ireland", published on 31 August 2026. The idea is refreshingly simple. Instead of juggling income tax, capital gains tax, exit tax, dividend withholding tax and USC on different investment products, savers will pay a single annual flat-rate charge of 1% on the account.
For ordinary savers, it offers a far clearer route into investing. For Irish businesses, a deeper pool of retail investment could, over time, mean more capital flowing into the economy. Alongside this, the rates of investment undertaking tax and life assurance exit tax are lowered, and the treatment of Irish exchange-traded funds is clarified.
The Practical Changes Every Business Owner Should Note
Beyond the headline measures, the Bill contains several changes that land directly on day-to-day business admin. There are changes to preliminary corporation tax requirements, so finance teams should check how much tax they need to pay in advance and when. The Enhanced Reporting Requirements for certain employee benefits — introduced in 2024 — are also amended, and there are changes to the rules on termination payments. Anyone running payroll should ask their accountant or software provider how these will work in practice.
On property, a new Derelict Property Tax will see owners pay 7% of a property's value by June 2028 unless they take action to bring it back into use. It is designed to encourage action rather than raise money, and it could put vacant buildings in towns and villages back to work as homes and premises. The Bill also includes a VAT modernisation package, an increase in the tax exemption for micro-generated electricity — good news for businesses with solar panels — and reductions and deferrals on carbon and mineral oil taxes.
For larger and international firms, there are changes to how Ireland taxes interest, updates linked to the global minimum tax rules known as Pillar Two, and an extension of the bank levy. The Bill completed its Second Stage debate in the Dáil on 20 October and will now move through committee, where detailed amendments are possible before it is signed into law before the end of the year.
What to Do Now
For workers, very little action is needed. The higher credits and wider bands will flow through payroll automatically from January, though it is always worth checking your tax credit certificate on Revenue's myAccount early in the new year. If you rent or are saving for a first home, look at the increased Rent Tax Credit and Help to Buy, as these are often under-claimed.
For SME owners, three steps make sense. First, if you are planning to sell an asset or part of the business, factor in the new 31% CGT rate. Second, if you do any development work at all, revisit whether you qualify for the enhanced R&D credit. Third, have a short conversation with your accountant about preliminary tax, employee benefit reporting and any succession plans, while there is still time before the year-end.
The Bottom Line
The Finance Bill rarely makes headlines, but it is where the Budget becomes real. This year's version puts more money into workers' pay packets, lowers the tax on gains, backs innovation and offers a simpler way for people to invest. For Irish SMEs and the people who work for them, it is a practical, positive package — and the businesses that take an hour now to understand it will be best placed to benefit from it in 2027.