Irish Tax Receipts Are Rising: What Cross-Border Businesses Should Watch In 2026

Ireland’s tax receipts remain at record levels, and that matters if your business operates across the UK to Ireland border. In 2025, Ireland collected €107.4 billion in total tax receipts, including once-off CJEU-related corporation tax receipts. On an underlying basis, excluding once-off items, tax receipts were €105.7 billion, up 8.9% on 2024. Income tax receipts reached €36.6 billion, VAT reached €22.9 billion, and underlying corporation tax receipts rose 17.2% to €32.9 billion.

The trend has continued into 2026. Income tax receipts in April 2026 were around €3.7 billion, up 4.8% year on year, and total tax receipts to the end of April were €28.0 billion, up 4.2% on the same period in 2025.

If you run a business with operations, customers, suppliers or staff in both jurisdictions, these numbers are not abstract fiscal trivia. They show where tax authorities are collecting strongly, where compliance attention is likely to stay high, and where your own cross-border exposure may be shifting.

What the receipts data is actually telling you

Strong receipts are usually presented as good news for the Irish Exchequer. For businesses, the more useful question is what they reveal about the tax base.

Two points stand out. First, corporation tax is still a very large part of the Irish tax base, with receipts heavily influenced by a relatively small number of multinational groups. Second, income tax and VAT, the broad-based taxes that affect ordinary trading businesses, are also rising steadily.

For a cross-border SME, the practical signal is clear. Revenue is well funded, increasingly data-led and likely to keep close attention on compliance. Our piece on common tax mistakes expats and cross-border businesses make covers the errors that surface most often when that attention lands on an SME.

The 15% minimum tax is the big structural change

The most significant structural change is Ireland’s implementation of the OECD Pillar Two global minimum tax rules. These rules apply to large multinational and large domestic groups with consolidated annual revenue of €750 million or more in at least 2 of the previous 4 fiscal years.

This does not mean Ireland’s 12.5% corporation tax rate has disappeared. The 12.5% trading rate remains in place for companies outside the Pillar Two rules, and therefore still applies to most owner-managed Irish companies. For in-scope groups, the issue is a 15% minimum effective tax rate, with top-up tax rules designed to bring the effective rate up where required.

The point that catches cross-border groups is the threshold test. It is based on consolidated group revenue, not the size of the Irish entity. A relatively small Irish subsidiary can be within Pillar Two if it belongs to a larger international group.

For groups caught by the rules, this is a compliance project, not just a rate issue. Our piece on tax planning for UK businesses expanding overseas covers wider international structuring, and setting up a company in both the UK and Ireland covers the structural questions that sit upstream.

Why cross-border businesses are exposed in a specific way

A business trading in 1 jurisdiction has 1 tax authority, 1 filing rhythm and 1 main set of rules. A cross-border business has 2 of each, and the interaction is where risk often appears.

The key areas to review are:

• Permanent establishment risk. If your UK company has staff, premises or significant activity in Ireland, you may create a taxable presence there, and vice versa.
• Transfer pricing. Connected UK and Irish companies must price transactions on arm’s length terms, with appropriate records.
• VAT on cross-border supplies. Since Brexit, goods moving between Great Britain and Ireland are imports and exports. Northern Ireland has different treatment under the Windsor Framework.
• Payroll for cross-border staff. Employees living in 1 jurisdiction and working in another can create PAYE, PRSI, National Insurance and social security issues.
• Withholding tax. Dividends, interest and royalties can trigger withholding obligations depending on the treaty position and structure.

This is where a dedicated Cross-border tax advisory team is worth far more than 2 separate accountants who never speak to each other. Our broader SME business solutions team works alongside the cross-border specialists to keep the operational and tax pictures joined up.

Income tax strength means payroll scrutiny

Irish income tax receipts rose 4.3% in 2025 and continued climbing into 2026. For employers, that matters because Revenue’s PAYE Modernisation system gives real-time visibility over payroll data.

The common cross-border payroll issues include:

• Misclassifying where employees are taxable
• Failing to operate Irish PAYE where required
• Getting the PRSI and National Insurance interaction wrong
• Mishandling Benefits-in-Kind, especially company cars
• Missing Irish Enhanced Reporting Requirements for certain tax-free payments and benefits

Our pieces on HMRC PAYE issues and salary sacrifice pension changes cover the UK side, and the cross-border payroll piece covers the interaction. For the broader compliance picture, how tax accountants help small businesses is a useful starting point.

VAT receipts are strong, which means VAT compliance matters more

Irish VAT receipts reached €22.9 billion in 2025, up 5.1% on the previous year. VAT is one of the most important revenue streams for the Irish Exchequer, and it is also one of the areas where cross-border businesses make the most expensive mistakes.

Since Brexit:

• Goods moving between Great Britain and the Republic of Ireland are treated as imports and exports
• Goods moving between Northern Ireland and the Republic of Ireland generally follow different rules under the Windsor Framework
• Goods moving between Great Britain and Northern Ireland have their own treatment
• Services have place-of-supply rules that differ from goods
• VAT registration thresholds differ between the UK and Ireland

Our piece on VAT compliance for businesses operating across the UK to Ireland border is the most relevant deep dive, and our Making Tax Digital explained and Making Tax Digital and what UK and Irish businesses need to know pieces cover the digital filing obligations that sit alongside VAT in the UK.

Capital Gains Tax receipts show transaction activity

Irish Capital Gains Tax receipts rose 25% year on year in 2025. For business owners, that points to a strong level of disposal and investment activity.

If you are thinking about a sale, preparation matters. Our pieces on how to prepare your business for sale, due diligence and its importance in business, and the indispensable role of chartered accountants in mergers and acquisitions cover the preparation that makes a transaction smoother.

The Irish CGT rate is generally 33%, while UK CGT treatment depends on the asset, taxpayer and reliefs available. Irish Revised Entrepreneur Relief can reduce the CGT rate to 10% on qualifying gains, with the lifetime limit increased to €1.5 million from 1 January 2026. In the UK, Business Asset Disposal Relief moved to 18% for qualifying disposals from 6 April 2026. Our corporate finance team works on this kind of cross-border transaction planning.

The concentration risk cuts both ways

Ireland’s corporation tax receipts remain highly concentrated. That concentration is useful when receipts are rising, but it is also a fiscal vulnerability. If multinational corporation tax receipts were to fall, pressure could increase on broader taxes such as income tax, VAT, employer social insurance and other levies.

This is not a prediction of imminent tax rises. It is a reason to keep your Irish and UK tax affairs clean, your reliefs properly claimed, and your structure efficient. Our pieces on the key financial KPIs every SME owner should be monitoring monthly and how management accounts help SME owners cover the financial discipline that keeps you ahead of issues.

Reliefs cross-border businesses should be reviewing

A rising tax take is a good moment to make sure you are claiming everything you are entitled to. Commonly under-used reliefs include:

• R&D tax credits. Ireland’s R&D tax credit is 30% for accounting periods beginning on or after 1 January 2024, with a 35% rate applying for later periods under the updated rules. The UK merged R&D expenditure credit is 20% for accounting periods beginning on or after 1 April 2024. Our pieces on what qualifies for R&D tax credits in the UK and Ireland, the companion R&D piece, and common mistakes businesses make claiming R&D tax relief cover the detail.
• Capital allowances. The UK main writing-down allowance rate fell from 18% to 14% from April 2026, while the £1 million Annual Investment Allowance remains an important planning tool. Our business owner’s guide to capital allowances covers the UK side.
• Irish Knowledge Development Box. This can provide a reduced effective rate for qualifying IP profits.
• Employment-related reliefs and grants. These differ significantly between the UK and Ireland.
• Land remediation relief. Our piece on land remediation relief explained covers who qualifies.

Claiming these correctly across 2 jurisdictions, without double-counting costs or triggering anti-avoidance issues, is where specialist cross-border advice matters.

What to check before year-end

If you run a cross-border business, review these points before your accounting period closes:

• Confirm your permanent establishment position in both jurisdictions
• Review transfer pricing documentation between connected entities
• Check VAT registration and treatment across all goods and services flows
• Reconcile payroll for cross-border or split-location staff
• Identify Pillar Two exposure if your group is near or above €750 million consolidated revenue
• Map R&D activity in both jurisdictions
• Review your corporation tax position against Irish and UK rules
• Check the timing and jurisdiction of any planned disposals
• Review capital allowances before major expenditure decisions

This is the kind of structured review our tax compliance and specialist tax teams run for cross-border clients every year. Our digital bookkeeping team makes sure the underlying records support it. For broader assurance, our external audit and internal audit teams cover the governance side.

When cross-border issues turn into disputes

Most cross-border tax issues are managed through good planning and clean compliance. Some escalate into Revenue or HMRC enquiries, shareholder disputes, partner disputes or investigations into misstated figures.

Where a cross-border position comes under formal challenge, the standard of evidence rises. Reconstructing the financial position of entities operating across 2 jurisdictions can be detailed work. Our forensic accountants Northern Ireland team has the experience to do this, and our pieces on what a forensic accountant does and when you need one, forensic accounting in shareholder and partnership disputes, and forensic accounting vs audit cover where this work fits.

If a cross-border business runs into financial difficulty, the recovery position can also be more complex because 2 insolvency regimes may be relevant. Our recovery and restructuring team handles this, and our pieces on how recovery accountants help improve cash flow, what an insolvency accountant does in business distress cases, and what happens to creditors during company insolvency cover the territory.

The wider 2026 backdrop

When reviewing your cross-border position, factor in these wider changes:

• Ireland’s 12.5% trading corporation tax rate remains for most companies, while Pillar Two applies a 15% minimum effective tax rate to in-scope large groups
• Irish income tax, VAT and CGT receipts rose in 2025 and remained strong into early 2026
• UK Section 455 tax on new overdrawn director loan advances increased from 33.75% to 35.75% from 6 April 2026. Our piece on protecting the family business with a family charter is relevant for owner-managed groups thinking about governance alongside this
• UK dividend tax rates increased by 2 percentage points for the basic and higher dividend rates from 6 April 2026, while the additional dividend rate remained unchanged
• UK Business Asset Disposal Relief increased to 18% for qualifying disposals from 6 April 2026
• UK Making Tax Digital for Income Tax now applies from 6 April 2026 to sole traders and landlords whose 2024/25 qualifying income exceeded £50,000
• At the end of April 2026, the Bank of England held Bank Rate at 3.75%, while the ECB deposit facility rate stood at 2.00%

For directors filing personally in either jurisdiction, our self-assessment tax returns guide for self-employed individuals in the UK and Ireland covers the personal filing position. For the longer-term strategic picture, the future of financial planning, why internal audit supports business growth, and switching to cloud accounting for SMEs are worth reading. For contractors specifically, what to expect during an external audit and how a quality external audit strengthens trust with lenders and investors cover the assurance angle.

FAQs

How much tax did Ireland collect in 2025?

Ireland collected €107.4 billion in total tax receipts in 2025. On an underlying basis, excluding once-off CJEU-related receipts, tax receipts were €105.7 billion, up 8.9% on 2024.

What is the Irish corporation tax rate in 2026?

For most trading companies, the 12.5% Irish corporation tax rate remains in place. Large groups within the Pillar Two rules are subject to a 15% minimum effective tax framework, which can create top-up tax and extra compliance obligations.

Why does the €750 million threshold matter?

The threshold is based on consolidated group revenue, not the size of the individual Irish company. A small Irish subsidiary can be affected if it is part of a larger group that meets the Pillar Two threshold.

What are the biggest cross-border tax risks for SMEs?

The main risks are permanent establishment, transfer pricing, VAT, payroll, social security and withholding tax. VAT often creates the most immediate cost because errors can affect pricing, cash flow and penalties.

How does Irish VAT work for businesses trading with Great Britain?

Goods moving between Great Britain and the Republic of Ireland are generally treated as imports and exports, with customs declarations and potential import VAT. Northern Ireland follows different rules under the Windsor Framework. The VAT treatment also differs between goods and services.

Can my business claim R&D relief in both Ireland and the UK?

Potentially yes, if you have qualifying R&D activity and distinct qualifying costs in each jurisdiction. You cannot claim the same cost twice, and you need clear evidence showing where the work was done and which company incurred the cost.

Get the right support in place

If your business operates across the UK to Ireland border, rising Irish tax receipts are a reason to get ahead of your position rather than wait for an enquiry. This is the work our team does day in, day out, combining cross-border expertise with knowledge of both tax systems.

As accountants Armagh businesses and cross-border firms across the island and the wider UK rely on, SCC Chartered Accountants keeps the 2 halves of your tax position joined up so nothing falls through the gap between jurisdictions.

Our Cross-border tax accounting team leads the work, supported by our tax compliance, specialist tax, and corporate finance teams as the situation requires.

Get in touch with the SCC team for a cross-border tax review tailored to your operations in both jurisdictions.