The Irish Department of Finance published a comprehensive review on the taxation of interest in Ireland in September 2024. The review forms part of broader work by the Department on modernising Ireland’s tax system.

As part of its ongoing engagement with the Department of Finance on Irish tax policy and modernising the Irish tax system, Arthur Cox LLP submitted a response highlighting the necessity for a full reform and modernisation of the rules to bring Ireland in line with EU and international norms.

The submission recommends achieving this by the introduction of a uniform rule for taxing interest income and deducting interest expense across all forms of commercial/business activity. This would include the introduction of a commercial/business purpose test for interest deductibility, subject to the various other rules and protections already in the Irish tax legislation that have been implemented in recent years.

You can read our response to the consultation on the tax treatment of interest in Ireland here.