Browne Jacobson comments on Irish Budget

Our legal experts have commented on the Irish budget, announced on Tuesday 7 October.

Commenting on research and development changes, Gavin Bluett, Partner in the corporate team at Browne Jacobson, said:

"The jump from 30% to 35% in research and development tax credits is a signal that Ireland is locking in on innovation. For tech companies and life sciences firms, this makes Ireland even more competitive as a home for cutting-edge research. 

"For the high-growth companies we work with, this budget is a mixed picture. The research and development tax credit increase to 35% is good news, it makes Ireland more competitive for innovation-driven businesses and will be particularly valuable for our tech and med-tech clients scaling their research capabilities. It also confirms what we’re seeing in the market on inward investment - strong optimism among business leaders on inward investment and inbound M&A this year. However, the decision to freeze income tax bands could be a challenge for talent retention and employee incentivisation."

Commenting on VAT cuts for new apartments, Emma Middleton, Legal Director in real estate, said:

"Cutting VAT on new apartments from 13.5% to 9% until 2030 will make the sale more accessible to the consumer, creating more supply and demand for the commercial development of apartments. It could ease the housing supply, with a 7% derelict property tax is a stick to match the carrot of development incentives. This will force landowners to either develop or sell, which should help activate dormant sites across the country."

"The enhanced corporate tax relief for converting existing buildings into apartments and converting non-residential property to residential is smart policy. It incentivises adaptive reuse and densification, which is exactly what our urban centres need."

Commenting on employment changes, Marie-Claire Scullion, head of employment for Ireland, said:

"Employers need to prepare now for the minimum wage increase to €14.15. While the adjustment to Employer's PRSI bands provides some relief, the real challenge is the frozen income tax band. Employees will see more of their pay rises taxed at 40%, which will inevitably drive stronger wage demands in 2026.

"Employment contracts, payroll systems, and budget forecasts will need updating, and employers should be proactive in communicating these changes to staff before they take effect. This is in addition to steps employers may be required to take in preparation for pensions auto-enrolment, which is also coming into effect in January 2026.”