The window for filing Interest Limitation Elections is extended to two years after the end of the accounting period, with deadlines for group ratio, equity ratio, and domestic elections aligned to the election timing.

Ireland moves to simplify and broaden relief measures while preserving competitiveness in a complex international tax landscape, clarifying eligibility and easing compliance burdens.

Introduces Simplified Effective Tax Rate Safe Harbour and Extended Transitional Country-by-Country Reporting Safe Harbour, plus a Substance-based Tax Incentive Safe Harbour with testing of conditions.

Borrowing relief is broadened: reinvested recovered capital within six months no longer curtails relief, and relief expands for funding connected-party asset acquisitions under bona fide commercial arrangements, including relief for connected-party debt via a group finance company to on-lend to borrowing companies.

From January 1, 2027, simplifications to interest deductibility include removing the requirement for common directors on borrowing/investee boards, treating certain non-Irish entities like Irish partnerships for relief purposes, simplifying the ‘used’ test for loans, and allowing currency conversions before using funds without denying relief.

Other Pillar Two changes cap penalties at €1 million for non-designated local entity failures to file top-up information returns, align local entity accounting periods with MNE group periods after reorganisations, update exemptions for non-cooperative jurisdictions, streamline APA-related payment timing, and add Liechtenstein and Sweden treaties to double taxation agreements.

Pillar Two updates introduce a Side-by-Side Safe Harbour for groups with a parent in qualifying jurisdictions and a UPE Safe Harbour proposal that zeroes top-up tax in the UTPR jurisdiction, though it only affects profits in the UPE jurisdiction and no UPE Safe Harbour has been designated yet.

The Finance (No. 2) Bill 2026 provides an introductory overview of broad international tax changes for Ireland, aimed at maintaining competitiveness as global rules become more complex.