The judicial system in Ireland is established by the Constitution and the principal courts are the district courts and circuit courts (with limited jurisdiction), the High Court (with unlimited jurisdiction in civil and criminal matters), the Court of Appeal (with appellate jurisdiction) and the Supreme Court (which usually exercises final appellate jurisdiction only). The judiciary is independent of the legislature and the executive.

Ireland is a member state of the EU and of the UN. The Irish legal system is similar in many respects to that of the UK and the US. Irish law is based upon the common law, statute and the Constitution. The EU also represents an important source of Irish law, and decisions of the Court of Justice of the European Union (CJEU) exercise significant influence over Irish law.

Ireland is the only EU common law jurisdiction, making it an attractive jurisdiction to establish operations and litigate international commercial disputes in. Other factors, such as the ease of doing business and the fact that it is the only Eurozone country in which English is the main language spoken, make Ireland one of the best destinations for foreign direct investment (FDI).

The FDI Screening Regulation

The EU Investment Screening Regulation (Regulation (EU) 2019/452, the “FDI Screening Regulation”) came into force in October 2020. The FDI Screening Regulation sets out rules which enable scrutiny of investment ventures pursued within the EU by third countries.

Individual member states retain discretion as to whether they implement a screening system, but any such system must then meet basic criteria concerning confidentiality, transparency and the application of review timeframes.

The Screening of Third Countries Transactions Act 2023

The Screening of Third Country Transactions Act (the “Screening Act”) was signed into Irish law on 31 October 2023 and is expected to come into force in September 2024. The Screening Act provides for a new FDI screening regime, as mandated by the FDI Screening Regulation.

The regime provided for in the Screening Act is suspensory (with criminal sanctions) and involves very low thresholds. It covers a wide variety of sectors (eg, critical utilities and infrastructure sectors, hi-tech and personal data focused businesses and media businesses) and needs to be considered in parallel with other foreign investment regimes as well as Irish and international merger control rules.

Under the Screening Act, a new mandatory notification to the Minister for Enterprise, Trade and Employment (the “Minister”) would be required for certain transactions that involve third-country or foreign-controlled undertakings that are parties to a transaction if the following conditions are met:

• a third-country undertaking or a connected person is a party to the transaction;
• the value of the transaction is at least EUR2 million;
• the transaction relates to critical infrastructure and technologies, natural resources, sensitive data or media; and
• the transaction relates to change of control of an asset or a defined change in share or voting rights in an undertaking in the state.

A failure to correctly notify the Minister will be a criminal offence and parties could be liable to: (a) on summary conviction, a fine of up to EUR5,000 and/or six months’ imprisonment; or (b) on conviction on indictment, a fine of up to EUR4 million and/or five years’ imprisonment.

Irish authorities currently impose no specific commitments on foreign investors in relation to their investments.

The parties to a transaction may appeal a screening decision to an adjudicator within 30 days. Adjudicators’ decisions may be appealed further within 30 days to the High Court on points of law only. These appeal proceedings would not be held in public due to the sensitivity of the issues involved.

The Companies Act 2014 (the “Companies Act”) provides for the creation of various types of corporate vehicles in Ireland. A company of any type may be incorporated with a single shareholder.

Company Limited by Shares (LTD)

The LTD is the model form of private company limited by shares and the most common form of corporate vehicle used by foreign investors. The LTD has the same unlimited legal capacity as an individual. It has a single document constitution, and its internal regulations may be set out in simplified form in that constitution. An LTD is prohibited from offering equity or debt securities to the public.

Designated Activity Company (DAC)

The DAC is an alternative form of private limited company. A key distinction between a DAC and an LTD is the existence of an objects clause in the DAC constitution. A DAC may be a suitable vehicle where an objects clause is needed (eg, to restrict the corporate capacity of a joint venture vehicle) or for companies listing debt securities on a stock exchange.

Unlimited Company

The Companies Act recognises three distinct types of unlimited company, which are:

• a private unlimited company with a share capital (ULC);
• a public unlimited company with a share capital (PUC); and
• a public unlimited company without a share capital (whose liabilities are guaranteed by its members) (PULC).

Members of an unlimited company may be held liable on an unlimited basis for the debts of the company in the event of it entering insolvent liquidation. ULCs may not offer for sale or list any new securities, but a PUC and PULC may list debt securities.

Public Limited Company (PLC)

The key distinction between PLCs and private companies is that only PLCs may list their shares on a stock exchange and offer them to the public. PLCs must have a minimum issued share capital of EUR25,000. A Societas Europaea (SE), the European model company, is regarded as a PLC under the Companies Act.

Guarantee Company (CLG)

A CLG does not have a share capital and is a popular type of company for charities, sports and social clubs, and property management companies. The members’ liability is limited to the amount they undertake to contribute to the assets of the CLG in the constitution of the company in the event of its winding-up.

To incorporate a company in Ireland, certain documents, including the company’s constitution, must be filed with the Companies Registration Office (CRO). Incorporation papers must contain the company name, registered office, directors’ and secretary’s details, subscriber details, the company’s principal activity and the place in Ireland where it proposes to carry on that activity. The incorporation form includes a declaration that the Companies Act requirements have been complied with.

Under an express incorporation scheme, a company can be incorporated within five working days. Otherwise, it may take two to three weeks to incorporate a company. On incorporation, the CRO will issue the company with a certificate of incorporation. CRO fees are EUR50, and the process is completed online.

Documents Presented at the AGM

Irish companies must generally present audited financial statements to the annual general meeting (AGM) and then publicly file a copy with the company′s annual return in the CRO (including certain disclosures concerning directors’ remuneration). A directors′ report on the state of affairs of the company and its subsidiaries must be attached to the balance sheet presented before the AGM. For all LTDs and other company types with one member (other than PLCs), a written procedure is available in place of an AGM. Small and micro companies are subject to fewer public disclosures and more relaxed reporting requirements.

Directors′ Additional Disclosures

Directors may need to make additional disclosures to the company if, for example, they hold shares representing more than 1% of the company’s share capital. Directors of companies with assets exceeding EUR12.5 million and a turnover exceeding EUR25 million must also make a prescribed form of compliance statement in their directors’ report.

Internal Register on Ultimate Beneficial Owner

Most Irish companies must maintain internal registers on individuals considered under law to be their ultimate beneficial owners. The EU (Anti-Money Laundering: Beneficial Ownership of Corporate Entities) Regulations 2019 also require in-scope entities to file their beneficial ownership details on a central beneficial ownership register to which there is currently greatly restricted public access. Where the company has no beneficial owner or the beneficial owner cannot be identified, details of the company’s senior managing officials (directors) must instead be provided.

Filings in Regard to Changes

CRO filings must be made in respect of changes to:

• the company name;
• the directors or company secretary;
• the registered office; and
• the share capital or the company constitution.

Details of mortgages or charges made regarding a company must also be filed with the CRO.

Irish companies are managed by a single-tier board of directors. All companies, other than LTDs, must have a minimum of two directors. The secretary may be one of the directors of the company. An LTD may have one director but there must be a separate company secretary in that case. A body corporate may act as secretary to another company, but not to itself. A body corporate may not act as a director.

At least one of the directors of an Irish company must be a resident of a member state of the European Economic Area (EEA) unless:

• the company posts a bond to the value of EUR25,000, which, in the event of failure by the company to pay a fine imposed in respect of an offence under company law or a penalty under tax legislation, will be used in the discharge of the company’s liability; or
• the company holds a certificate from the CRO confirming that the company has a real and continuous link with one or more economic activities carried on in Ireland.

Directors’ common law fiduciary duties are codified in the Companies Act and include the duty to:

• act in good faith in what the directors consider to be in the interests of the company;
• act in accordance with the company′s constitution and only use their powers for the purposes allowed by law;
• avoid conflicts of interest between the director′s duty to the company and their other interests (including personal interests) unless the director is released from this duty; and
• exercise the care, skill and diligence which would be exercised in the same circumstances by a reasonable person having both the knowledge and experience that may reasonably be expected of a person in the same position as the director and with the knowledge and experience that the director possesses.

An additional duty, to have regard to the interests of creditors, may apply in certain cases (eg, on insolvency).

Where a breach of duty by a director is proved, they may be required to account to the company for any personal gain made and indemnify the company for any loss or damage resulting from the breach. Generally, parent companies are not liable for the acts of limited liability subsidiaries, but they may be liable under parent company guarantees.

Directors′ duties are owed (to varying degrees) to the company, the shareholders, the company’s employees, the company’s creditors and any appointing shareholder. Directors may be found criminally liable for certain breaches of the Companies Act and other offences including in respect of environmental, data protection, health and safety, and tax law.

However, subject to certain limitations in the Companies Act, a company is permitted to indemnify a director in respect of liability incurred in defending proceedings, whether civil or criminal, in which judgment is given in the director’s favour or the director is acquitted, or where the High Court, in an application for relief, declares that the director has acted reasonably and honestly. In practice, the directors of Irish subsidiaries of multinational companies benefit from group-wide D&O insurance policies.

Employment protection laws in Ireland apply to all employees working in the country, irrespective of the employee’s nationality.

Employment law is primarily governed by:

• the Constitution;
• statutes and EU law;
• judicial precedents;
• common law (including contract law);
• statutory mechanisms put in place by the state to regulate certain sectors, including Sectoral Employment Orders (SEOs) which require acceptance by the Minister of State at the Department of Enterprise, Trade and Employment following a recommendation from the Labour Court;

• collective bargaining agreements; and
• custom and practice in the workplace and workplace or industry rules.

The primary legislation regulating employment relationships includes:

• the Unfair Dismissals Acts 1977 to 2015;
• the Employment Equality Acts 1998 to 2021;
• the Redundancy Payments Acts 1967 to 2022;
• the National Minimum Wage Acts 2000 and 2015 and the Payment of Wages Act 1991;
• the Terms of Employment (Information) Acts 1994 to 2014;
• the Maternity Protection Acts 1994 to 2022 (and other protective leave legislation);
• the Minimum Notice and Terms of Employment Acts 1973 to 2005;
• the Fixed Term Workers, Part Time Employees and Agency Workers Protection legislation;
• the Organisation of Working Time Act 1997; and
• the European Communities (Protection of Employees on Transfer of Undertakings) Regulations 2003.

The Employment (Miscellaneous Provisions) Act 2018

Under the Employment (Miscellaneous Provisions) Act 2018, which was updated by the European Union (Transparent and Predictable Working Conditions) Regulations 2022, employers must notify employees in writing, within five days of commencement of employment, of the following core terms of employment:

• the full names of the employer and the employee;
• the address of the employer;
• the expected duration of the contract in the case of a temporary contract, or the end date if the contract is for a fixed-term;
• the rate or method of calculation of the employee’s pay;
• any terms or conditions relating to hours of work, including overtime and the number of hours the employer reasonably expects the employee to work per normal working day and normal working week;
• the place of work, or where there is no fixed or main place of work, a statement stating that there are various places or that the employee is free to set their own place of work or to work at various places;
• the date the employment started;
• the job title, grade or nature of the work; and
• the duration and conditions relating to the probation period (if any).

The Terms of Employment (Information) Act 1994

Under the Terms of Employment (Information) Act 1994, all employers are obliged, within one month of commencement of employment, to provide their employees with a written statement setting out certain fundamental terms of their employment, such as pay intervals, paid leave (including annual leave and sick pay entitlement), pension and pension schemes, notice requirements, details of any collective agreements, any training to be provided, the identity of the recipient agency for social security contributions and any protection relating to social security arrangements. In addition to the above, if the work pattern is entirely or mostly unpredictable, the employer must provide the employee with information about the number of guaranteed hours, the hours and days the employee may be required to work and the minimum notice of a work assignment. For temporary agency contracts, the employer must also provide the identity of the person or firm hiring the agency worker. The statement must be signed by both the employee and the employer. Any change to the statutory particulars must be notified to the employee, in writing, no later than the day on which the change takes effect.

An employer may not permit any employee to work for more than an average of 48 hours per week over a particular reference period (usually four months). This reference period varies depending on the type of employment in question. Working time should only take account of time spent working (ie, it should exclude rest and meal breaks).

Employees cannot opt out of the 48-hour average working week. However, there is a particular exemption for senior or specialist employees, who can determine their own working time, such that they are not subject to the restriction. The contracts of these employees should expressly provide that they are exempt from the 48-hour average working week.

Overtime

Generally speaking, there is no statutory entitlement to overtime under Irish law or payment for overtime. Employees will only be entitled to overtime pay if such an entitlement is contained in their employment contract or established by custom and practice in the employment concerned. However, employers that require employees to work on Sundays are required to compensate them for doing so, whether in terms of paying a Sunday premium or specifically considering that they may be required to work on a Sunday in calculating the rate of pay.

An employer can, under common law, terminate an employment contract without cause, provided this is in accordance with the terms of the contract. Notwithstanding any express contractual right to terminate, employees are afforded statutory protection against unfair or discriminatory dismissal. Under the Unfair Dismissals Acts 1977 to 2015 (UDA), an employer cannot lawfully dismiss an employee unless substantial grounds exist to justify termination.

An employer must also be able to establish that fair procedures have been followed before the dismissal. Subject to certain exceptions, employees must have at least 12 months’ continuous service to qualify for protection under the UDA.

Generally, a dismissal will only be justified if it is based on one of the following grounds.

• The capability, competence or qualifications of the employee for the work concerned.
• The conduct of the employee.
• The redundancy of the employee.
• The employee is prohibited by law from working or continuing to work (eg, not holding a valid work permit where one is required).

If one of these grounds cannot be established, there must be other substantial grounds to justify the dismissal.

Ending a Contract of Employment

Where an employee or an employer wishes to end a contract of employment, minimum periods of notice apply where an employee has been in continuous service for at least 13 weeks. The notice period to be given by an employer depends on the employee′s length of service. It varies from one week, applicable where an employee has been employed for up to two years, to eight weeks′, applicable where an employee has been employed for 15 years and more. Employees, on the other hand, are only obliged to give notice of one week, irrespective of their length of service. However, these are only the minimum periods.

A contract of employment may specify a longer notice period on either side, and it generally does, with notice periods typically ranging from one to six months depending on the seniority of the role. There is no requirement to pay an employee severance in the event of dismissal unless it arises because of redundancy.

PEA procedures

The Protection of Employment Acts 1977 to 2014 (PEA) prescribe the procedures to be followed in a collective redundancy. Employers must initiate consultation at the earliest opportunity and, in any event, at least 30 days before the first notice of dismissal is given. Where an employer effects collective redundancies, they must, with a view to reaching an agreement, initiate consultation with employee representatives in relation to matters such as the possibility of avoiding or reducing the proposed redundancies and the basis on which it will be decided which particular employees will be made redundant.

The PEA require employers to provide employee representatives and the Minister for Enterprise, Trade and Employment with certain written information, such as the proposed number of redundancies and a description of the employees the employer proposes to make redundant. The Minister must also be notified of the proposals at least 30 days before the first notice of redundancy is given.

Statutory redundancy pay

Statutory redundancy pay is currently two weeks’ pay for each year of service, plus one extra week’s pay. A week’s pay for these purposes is currently subject to a ceiling of EUR600 a week. For both ordinary dismissals and collective redundancies, it is commonplace for employers to offer employees an ex gratia payment upon termination of employment in exchange for the employees signing a compromise agreement that waives all employment law claims against the employer.

The concept of employee representation under Irish law relates to both unionised and non-unionised employees and is derived from a number of statutory and non-statutory sources.

Trade Union Representation

Any employee has the right to join a trade union, although trade unions may not legally compel employers to recognise and negotiate with them. The degree to which trade unions may embark upon industrial action is regulated principally by the Industrial Relations Act 1990. Employee representatives are appointed by way of a secret ballot.

Information and Consultation Representation

In addition to any local representation arrangements (whether with trade unions or otherwise), employees may be entitled to representation in certain circumstances as a matter of statute. This form of representation can arise in transfers of undertakings, in collective redundancy situations or where the employees are covered by a local or European-level works council.

The Transnational Information and Consultation of Employees Act 1996 (as amended) (the “1996 Act”) requires undertakings with at least 1,000 employees in the EU and 150 or more employees in each of at least two member states to set up European works councils to inform and consult with their employees on a range of management issues relating to transnational developments within the organisation. Under the 1996 Act, a special negotiating body (SNB) is established to negotiate with the employer. The duration and functions of the SNB will be subject to the terms and purpose of the works council agreement put in place.

The Employees (Provision of Information and Consultation) Act 2006 obliges employers with at least 50 employees to enter into a written agreement with employees or their elected representatives setting down formal procedures for informing and consulting with them. The legislation will only apply if a prescribed minimum number of employees request it. The legislation is silent on how employee representatives are elected, and it will be up to the employees to determine how this is conducted, but usually, it is by way of a secret ballot.

The primary Irish taxes applicable to employees and employers in the context of an employment relationship are income tax, pay-related social insurance (PRSI) and the universal social charge (USC).

Income Tax

Irish tax law generally imposes income tax on an individual where they are resident or ordinarily resident in Ireland in the year of assessment or if employment is exercised in Ireland in the year of assessment.

An individual will be considered resident in Ireland in a year of assessment if they are present in Ireland for at least 183 or 280 days in that year and the preceding year when taken together (provided that the individual has been present for at least 30 days in each of these two years). An individual will be regarded as ordinarily resident in Ireland for tax purposes if the person has been resident in Ireland for three consecutive years immediately preceding the year of assessment.

Different income tax rate bands apply depending on an employee’s circumstances. The current standard rate of income tax is 20%, which applies to the first EUR42,000 per year earned by a single person without children and to the first EUR51,000 per year earned by a married person or a person in a civil partnership. A higher 40% rate is applied to any remaining balance.

PRSI

PRSI is Ireland’s equivalent of social insurance or social security contributions. Subject to certain limited exceptions, anyone employed in Ireland is generally subject to PRSI and payments are generally collected by the employer through the PAYE system. The amount of PRSI paid by an employee depends on the employee’s income and the PRSI class of the employee.

The most common PRSI class for private sector employees in Ireland is Class A (employees in industrial, commercial and service-type employment with gross earnings of EUR38 or more in a week). A Class A employee’s PRSI contribution will generally be 4% of all “reckonable earnings” (including employee share-based remuneration and any benefit in kind). The employer must separately make a PRSI contribution of 8.8% on weekly earnings up to EUR441 and 11.05% on weekly earnings over EUR441. From 1 October 2024, the rate of PRSI (employer and employee) will increase by 0.1%.

USC

Employees in Ireland are also subject to a further tax payable on total income, known as USC. For 2024, the first EUR12,012 of an individual’s aggregate annual income will be taxed at a rate of 0.5%, the following EUR13,748 at 2%, the following EUR44,284 at 4% and the remaining balance at 8%. An additional surcharge of 3% applies to individuals who are self-employed or whose non-employment-related income exceeds EUR100,000 in a year.

The primary Irish taxes applicable to businesses are corporation tax on income and chargeable gains, VAT, withholding tax and stamp duty.

Corporation Tax

A company resident in Ireland for Irish tax purposes will be subject to corporation tax on its worldwide profits and gains regardless of where those profits arise. A company that is not tax resident in Ireland is liable to corporation tax in Ireland if it carries on a trade in Ireland through a branch or agency.

A non-Irish tax resident company may be subject to corporation tax on gains realised on the disposal of Irish-situated assets used for such a trade carried on in Ireland or realised on the disposal of certain specified Irish assets, including Irish land or buildings or shares in a company that derive the greater part of their value from Irish land or buildings. Where a non-Irish tax resident entity sells Irish patent rights in return for a capital sum, a charge to Irish tax at a rate of 25% can also arise.

A company will generally be considered tax resident in Ireland if it is centrally managed and controlled in Ireland, regardless of where it is incorporated. If a company is incorporated in Ireland, the general rule is that the company will be Irish tax resident unless it is tax resident in another country under the terms of a double tax treaty.

The rate of corporation tax payable on a company’s profits will depend on whether the profits arise from trading (broadly, operational activities) or non-trading (eg, passive investment) activities. A low rate of 12.5% applies to trading profits, with a 25% rate applying to non-trading income. The question of whether a company is carrying on a trade is primarily one of fact to be decided on a case-by-case basis, although Irish Revenue is willing to provide an opinion as to whether a particular activity constitutes the carrying on of a trade in certain circumstances.

Losses incurred by a company in respect of trading operations can generally be carried forward indefinitely for use against future profits of that trade. Losses can also be surrendered to other companies within a group for Irish corporation tax purposes.

OECD Pillar Two Minimum Tax

Ireland has implemented the OECD’s Two-Pillar solution to address the tax challenges arising from the digitalisation of the economy in line with the EU Implementing Directive. The Directive obliged EU member states, including Ireland, to introduce a minimum tax rate of 15% for multinationals with annual revenue over EUR750 million. Ireland introduced its legislation in Finance (No 2) Act 2023 and came into force on 31 December 2023.

Ireland has implemented a qualifying domestic minimum top up tax (QDMTT) to top-up Irish tax paid by in-scope entities to 15% (on profits computed in accordance with the OECD Pillar Two rules and the EU Directive).

The existing 12.5% corporation tax rate continues to apply to multinationals and domestic businesses operating in Ireland that do not exceed the EUR750 million group revenue threshold. As a result, there has been no change in the 12.5% corporation tax rate for the majority of businesses in Ireland which remain outside the scope of the minimum tax.

Chargeable Gains

Chargeable gains realised by an Irish tax resident company on the disposal of a capital asset are generally subject to corporation tax at an effective rate of 33%, where relief or exemptions are not available. A non-Irish resident company will be subject to corporation tax in a similar manner on gains realised on the disposal of specified Irish assets (broadly, Irish branch assets and Irish land and buildings, Irish minerals and exploration rights, or shares deriving their value from such assets or Irish branch assets).

VAT

Supplies of goods and services in Ireland are generally subject to VAT. The standard rate of VAT in Ireland is 23%. Reduced rates ranging from 0% to 13.5% may apply to supplies of certain specified goods and services, and full exemptions apply to certain goods or services. A business engaged in an activity subject to VAT should typically be entitled to recover the VAT it incurs on purchases, subject to certain exceptions.

The obligation to account for VAT on supplies made by a company may arise for the supplier or customer, depending on the relevant circumstances, such as whether the supply involves a cross-border element. Businesses are generally obliged to register for VAT in Ireland.

Withholding Tax

Ireland imposes withholding tax on payments of distributions and dividends by Irish-resident companies at a rate of 25% and payments of interest, patent royalties and certain annual payments at 20%. However, there are broad exemptions from these withholding requirements. As a result, withholding tax will generally not arise on payments made to persons resident in another EU member state or in a jurisdiction with which Ireland has agreed a double taxation treaty.

Stamp Duty

Irish stamp duty applies to certain documents that transfer property and are executed in Ireland, relate to property situated in Ireland (such as Irish real estate or shares in Irish companies), or relate to a matter or thing done or to be done in Ireland.

However, there are various exemptions and reliefs from Irish stamp duty, including an exemption for transfers of certain IP rights and broad reliefs for intra-group transfers and group reorganisations and mergers. Where an exemption is not available, stamp duty generally applies at a rate of 1% to transfers of shares and 7.5% for transfers of commercial property.

There are a number of tax credits and incentives available in Ireland, including research and development tax credits and capital allowances for capital expenditure incurred to acquire certain intellectual property. In the Finance Act 2022, a new digital games tax credit was introduced to incentivise developers to produce digital games that contribute to the promotion and expression of Irish and European culture. The credit is available on expenditure incurred in the design, production and testing stages of the development of qualifying digital games, provided certain conditions are satisfied, including that the qualifying expenditure is not less than EUR100,000.

Research and Development Tax Credit

Irish tax legislation provides a tax credit regarding certain expenditures on research and development activities, buildings and plant and machinery. Credit is available for 30% of the allowable expenditure (in addition to a general tax deduction at 12.5%).

A number of conditions must be satisfied for the credit to be available, including a requirement that the research and development seeks to achieve scientific or technological advancement and involves the resolution of scientific or technological uncertainty.

Ireland recently increased the rate of its R&D tax credit to 30% to ensure that this regime remains best in class and is regarded as a “qualifying refundable tax credit” for the purposes of the OECD’s Pillar Two rules.

Capital Allowances Regime for Capital Expenditure on the Provision of Certain Intellectual Property

A special capital allowances (tax depreciation) regime is available for capital expenditure incurred to acquire certain categories of intellectual property (known as “specified intangible assets”) for a company’s trade. Specified intangible assets for these purposes include patents, trade marks, brands, copyrights or computer software, among other categories of IP.

Capital allowances on qualifying expenditure may either be claimed: (i) in accordance with amortisation charged to the profit-and-loss account of the company; or (ii) on a straight-line basis over 15 years at the rate of 7% for the first 14 years and 2% in the final year. Capital allowances are available to offset taxable profits earned from the specified intangible assets subject to an 80% cap.

Revenue will expect a robust valuation report to support the arm’s length nature of the capital expenditure, and taxpayers must maintain documentation and records used to prepare the intellectual property valuation.

Tax consolidation is not available under Irish tax law, and a company subject to corporation tax must prepare and file its tax return for corporation tax purposes for each assessment period. However, Irish tax law does provide for group relief, which permits companies within the same corporate group to surrender certain losses to other profitable group companies.

Ireland does not have any specific thin capitalisation rules, but there are a number of circumstances where interest payments may be considered non-deductible in calculating the taxable profits of a company.

For instance, interest paid by a company may be recharacterised as a non-deductible distribution where interest is paid for securities that are convertible into shares, where interest is dependent on the company’s results, or where it represents more than a reasonable commercial rate.

Ireland has introduced anti-hybrid rules and anti-reverse-hybrid rules, in accordance with the EU Anti-Tax Avoidance Directive (ATAD). These rules can deny tax deductions in respect of certain arrangements between associated enterprises, giving rise to tax mismatches as a result of hybrid instruments or entities. The rule can also apply to treat certain transparent Irish entities as subject to tax.

Ireland has also implemented interest limitation rules in accordance with EU ATAD. These rules apply to cap deductions for interest at 30% of earnings before interest, taxes, depreciation and amortisation (EBITDA) in certain circumstances.

Ireland introduced defensive measures in respect of certain outbound payments made after 1 April 2024. These measures operate to remove exemptions from withholding taxes on certain outbound payments of interest, royalties and distributions to an associated entity who is resident in a “zero-tax” or “no-tax” jurisdiction or in a jurisdiction listed on the EU Blacklist.

There is grandfathering from these measures until 1 January 2025 for arrangements which were in place on or before 19 October 2023. There are also a number of exceptions from these defensive measures where the outbound payment is subject to a CFC tax, a qualifying Pillar Two tax or is paid out of income that has been subject to tax in certain circumstances.

Irish transfer pricing rules apply the arm’s length principle to trading transactions between associated enterprises. In this context, “arm’s length” is to be construed in accordance with OECD guidelines. The Irish transfer pricing rules were significantly amended from 1 January 2020 to align with the 2017 OECD guidelines, including enhanced documentation requirements. The Finance Act 2022 ensured that, in line with international developments, Ireland’s transfer pricing rules are to be construed in accordance with the 2022 version of the OECD guidelines.

Broadly, Ireland’s transfer pricing rules require that if the actual consideration payable or receivable by a trader in a transaction with an associated enterprise is other than at arm’s length, then any understatement in the trader’s profit will be reversed so that the full arm’s length profit of the trader will be taxed.

The Irish rules were updated from 1 January 2020 to apply to non-trading transactions (save for certain non-trading transactions between two Irish residents) in addition to trading transactions. The Irish transfer pricing rules can now also apply to capital transactions where the market value of the asset exceeds EUR25 million.

Ireland has strict anti-evasion rules that impose criminal sanctions on those who fraudulently evade tax and anyone who facilitates such evasion. Anyone found guilty of an offence may be fined and/or imprisoned.

Anti-avoidance Rule

Ireland also has a general anti-avoidance rule that applies in respect of tax-avoidance transactions. Broadly, a tax avoidance transaction in this context is a transaction which gives rise to a tax advantage and is undertaken primarily to claim a tax advantage and not for bona fide commercial reasons. In such cases, Revenue may deny or withdraw the relevant tax advantage. In determining whether a transaction is a tax avoidance transaction, regard will be given to:

• the form of the transaction;
• the substance of the transaction and any other transaction(s) directly or indirectly related to or connected with that transaction; and
• the final outcome of the transaction and any related transaction.

As such, genuine commercial arrangements undertaken with a view to making a profit should generally not be subject to the general anti-avoidance rule.

Exit Charge

Ireland introduced an ATAD-compliant exit tax in October 2018. The exit tax is charged at a rate of 12.5% and applies to unrealised capital gains inherent in assets where:

• a company migrates its place of residence from Ireland to any other jurisdiction; or
• assets or a business of an Irish permanent establishment (PE) are allocated from the PE back to its head office or to a PE in another jurisdiction (this limb of the charge only applies in respect of companies that are resident in an EU member state other than Ireland).

The exit charge does not apply to assets that remain within the Irish tax charge. A higher 33% exit charge can apply where the transaction forms part of an arrangement to subsequently dispose of the relevant assets.

Where the relevant company/assets have been migrated to an EU/EEA country, the exit charge may be deferred and, in such circumstances, is payable in instalments over five years. If the exit charge is unpaid, Revenue may pursue any other Irish-resident group company or a director who has a controlling interest in the company subject to the charge.

The Irish merger control regime applies to “any merger or acquisition” defined by Section 16(1) of the Competition Acts 2002 to 2022 (the “Act”), as amended, including transactions where:

• two or more undertakings, previously independent of one another, merge;
• one or more individuals who already control one or more undertakings or one or more undertakings acquire direct or indirect control of the whole or part of one or more other undertakings; or
• the acquisition of part of an undertaking, although not involving the acquisition of a corporate legal entity, consists of acquiring assets that constitute a business to which a turnover can be attributed (here, “assets” include goodwill).

Turnover Thresholds

Mergers and acquisitions that meet the turnover thresholds set out in Section 18(1) of the Act are subject to mandatory notification to the CCPC, where, for the most recent financial year:

• the aggregate turnover within Ireland of the undertakings involved is not less than EUR60 million; and
• the turnover within Ireland for each of two or more of the undertakings involved is not less than EUR10 million.

The simplified merger notification procedure can be used for transactions that meet the financial thresholds for notifications but pose no risk of substantial lessening of competition in Ireland, for example, where there is no horizontal or vertical overlap between the undertakings involved, where the combined market shares are less than 15% in cases of horizontal overlap and 25% in cases of vertical overlap, or where there is a change from joint to sole control in a pre-existing joint venture.

Where these requirements are not met, mergers may still be notified to the CCPC on a voluntary basis under Section 18(3) of the Act. The CCPC can also investigate mergers falling below the turnover thresholds, (and “call in” such mergers) where they believe the merger could present competition issues.

Joint Ventures

Only full-function joint ventures (ie, those which perform, on a lasting basis, all the functions of an autonomous economic entity) constitute a merger for the purposes of the Irish merger control regime. The CCPC, which is primarily responsible for the enforcement of the Irish merger control regime, adopts an approach mostly consistent with the European Commission in identifying whether joint ventures are subject to Irish merger control law.

Where a joint venture does not qualify as full-function, the CCPC may assess it under Section 4 of the Act, based on Article 101 of the Treaty on the Functioning of the European Union (TFEU). Typically, the CCPC will have regard to the European Commission’s Guidelines on Horizontal Cooperation Agreements and the Guidelines on Vertical Restraints when undertaking such an assessment.

A filing must be submitted to the CCPC prior to implementing the merger and may be made as long as the undertakings involved demonstrate a good faith intention to conclude an agreement.

Phase I

A Phase I clearance determination must be issued by the CCPC within 30 working days of the “appropriate date”, which means the date on which a complete filing by the merging parties is made unless either the CCPC has used its power to “stop and restart the clock” by issuing a formal requirement for information (RFI). This has the effect of resetting the clock and only restarting it when the RFI is complied with or when the parties and the CCPC commence negotiating remedies, in which case, the Phase I period is extended to 45 working days. The CCPC also issues “informal” requests for information that do not stop and restart the clock.

Phase II

A Phase II clearance determination must be issued by the CCPC within 120 working days of the appropriate date. If the CCPC issues a formal RFI in the first 30 working days of the Phase II period, this has the effect of stopping and restarting the clock in the same way as in Phase I. If the parties and the CCPC are negotiating remedies, the Phase II period is extended to 135 working days.

Obligations and Failure to Notify

A suspensory obligation is included in the Act. Section 19(1) of the Act imposes a prohibition on the merging parties putting a merger that has been notified (both mandatorily and voluntarily) into effect prior to the issuing of a clearance determination.

Under Sections 18(9) and 18(10) of the Act, failure to notify a merger that meets the turnover thresholds is a criminal offence punishable by fines of up to EUR250,000, plus EUR25,000 per day for a continued breach. The CCPC can now also impose administrative fines or could also seek (with the Director for Public Prosecutions) criminal sanctions.

Anti-competitive agreements and practices are prohibited under Section 4 of the Act based on Article 101 of the TFEU. Section 4 prohibits agreements, decisions and/or concerted practices that have as their object or effect the prevention, restriction or distortion of competition in trade in any goods or services in Ireland or any part of Ireland. The Act applies to businesses operating in Ireland and international businesses where an agreement is found to restrict competition in Ireland.

Section 4 sets out a non-exhaustive list of agreements that are prohibited, such as those that:

• directly or indirectly fix purchase or selling prices or any other trading conditions;
• limit or control production, markets, technical development or investment;
• share markets or sources of supply;
• apply dissimilar conditions to equivalent transactions with other trading partners (thereby placing them at a competitive disadvantage); or
• make the conclusion of contracts subject to acceptance by other parties of supplementary obligations that by their nature or according to commercial usage have no connection with the subject matter of the contracts.

Section 6 of the Act makes it a criminal offence to enter into or implement an agreement, decision or concerted practice prohibited under Section 4. The CCPC operates a Cartel Immunity Programme with the Director of Public Prosecutions and a separate Leniency Programme which provides for the possibility of immunity or leniency from prosecution or civil action for the company/business to come forward to report certain competition offences.

Abuse of a dominant position is prohibited by Section 5 of the Act and Article 102 of the TFEU. Section 5 of the Act mirrors Article 102 of the TFEU, except that it refers to the abuse of a dominant position in trade for any goods or services in Ireland or any part of Ireland. While the Act refers to trade in goods and services in the state, its provisions are also likely to apply to international businesses/trade that are/is found to be dominant and where there is an effect on trade in Ireland.

Definition of Dominance

There is no definition of dominance within the Act. The Irish courts and the CCPC have adopted the definition formulated by the CJEU in case 27/76, United Brands v Commission [1978] ECR 207: “[a] position of economic strength enjoyed by an undertaking which enables it to prevent effective competition being maintained on the relevant market by affording it the power to behave to an appreciable extent independently of its competitors, customers and ultimately of its consumers”.

Section 5(2)(a) to (d) of the Act also sets out several examples of what constitutes abuse of dominance. These are:

• directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
• limiting production, markets or technical development to the prejudice of consumers;
• applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; and
• making the conclusion of contracts subject to the acceptance by other parties of supplementary obligations that according to commercial usage have no connection with the subject of such contracts.

Remedies

As in the case of cartels, the Act makes abuse of a dominant position a criminal offence that can be prosecuted before the Irish courts and is punishable by financial penalties. The Act also includes specific provisions for aggrieved persons and the CCPC to take civil proceedings before the Irish courts seeking remedies for abuse of a dominant position. The remedies available in civil proceedings include a court declaration, damages, imposing structural measures and an injunction.

Definition

Any inventive product/process is patentable under Irish law if it:

• is susceptible to industrial application;
• is new; and
• involves an inventive step.

Certain inventions are specifically excluded under Irish law, including a discovery or scientific theory, computer programs and methods of doing business.

Length of Protection

Patent protection lasts for up to 20 years from the date of the application, subject to the payment of renewal fees. Irish law also provides for the extension of full-term patents for pharmaceuticals for human or animal use for up to five years.

Irish law also provides for short-term patents, which have a ten-year duration. The test of inventiveness for a short-term patent is lower than for a full-term patent. Short-term patents may be converted to full-term patents where they meet the requirements for a full-term patent.

Registration

Applications for Irish patents are filed at the Intellectual Property Office of Ireland (IPOI). The specification forming part of the application must include the title of the invention, description of the invention and claim or claims and drawings, if any, referred to in the description.

It is also possible to file a patent application at the European Patent Office (EPO) under the European Patent Convention (EPC) or at the World Intellectual Property Organisation (WIPO) under the Patent Cooperation Treaty (PCT) and to designate Ireland for patent protection. The EPC and the PCT both facilitate the application for patents in a number of jurisdictions, but these are effectively a bundle of applications to a number of states.

There are plans to reform both registration and enforcement under the Unified Patent Court Agreement. This reform consists of two pillars: (i) the creation of a new European patent with unitary effect; and (ii) the establishment of the Unified Patent Court.

The Agreement on a Unified Patent Court was signed in February 2013 by 25 EU member states, including Ireland. An amendment to Article 29 of the Irish Constitution is required before Ireland can ratify the agreement, as it entails a transfer of jurisdiction in patent litigation from the Irish courts to an international court. On 23 January 2024 the Government approved a proposal to hold a constitutional referendum in June 2024. However, this has since been postponed with no alternate date chosen.

Enforcement and Remedies

Patents in Ireland are enforced through civil claims against infringing parties. A patent owner can prevent direct or indirect use of their invention by third parties in Ireland without consent.

The courts have a wide range of civil remedies available to them to compensate aggrieved owners. These include a declaration of the validity of a patent and that it has been infringed, damages for infringement, injunctive relief and orders to account for profits, and to seize, destroy and/or hand over infringing goods to the patent holder. This will be subject to change upon ratification of the Unified Patent Court Agreement.

Definition

A trade mark under Irish law is any sign capable of both:

• being represented graphically; and
• distinguishing the goods or services of one undertaking from those of other undertakings.

A trade mark may consist of words (including personal names), designs, letters, numerals or the shape of goods or their packaging.

Unregistered trade marks have a limited protection in Ireland through the law of passing off, in a manner similar to that applying in other common law jurisdictions.

Length of Protection

Registered trade marks (be they national Irish marks, Madrid Protocol marks or EU trade marks) are registered initially for ten years but, uniquely among intellectual property rights, this term can be renewed indefinitely for successive ten-year terms on payment of a renewal fee.

A trade mark registration will only remain valid to the extent that the mark is used by the owner in respect of the goods/services for which it was registered.

Registration

There are three options open to trade mark proprietors carrying on business in Ireland.

An application for an Irish trade mark at the IPOI

An IPOI examiner scrutinises the application to ensure that it can be considered a trade mark under Irish law and generally examines the application to see if its use would infringe pre-existing Irish/EU trade marks or if it otherwise falls within a prohibited form of trade mark. If satisfied with the application, the IPOI publishes it in the Official Journal. Third parties then have three months to oppose the application by filing a notice of opposition.

If there is no opposition, the application will proceed to registration on payment of the registration fee.

An application for an EU trade mark at the European Union Intellectual Property Office (EUIPO)

EU trade marks are filed with the EUIPO and undergo an examination, publication and opposition procedure prior to registration, similar to that described for Irish trade marks above. An EU trade mark is a unitary European-wide property right and protects the trade mark proprietor in all member states of the EU.

An international application designating certain states, including Ireland, under the Madrid Protocol

On request, the IPOI will forward a trade mark application or registration to the International Bureau of the WIPO in Geneva. The Irish trade mark application or registration serves as a base on which the proprietor may designate the mark for registration in other Madrid Protocol countries, eg, the UK and the US. The International Bureau notifies the trade mark offices designated in the international filing, which, in turn, decide whether to accept the application for registration in their territory.

A Madrid Protocol filing can be a cost-effective and efficient way to obtain trade mark protection in multiple jurisdictions.

Enforcement and Remedies

An infringement will occur where a mark that is the same as or similar to a registered mark is used in relation to the same or similar goods or services as the registered mark. Where the mark used by a third party is not identical to the registered trade mark, the proprietor needs to show that there is a likelihood of confusion on the part of the public.

The reliefs available for trade mark infringement include damages, injunctions and orders for an account of profits, and the destruction or delivering up of infringing goods.

An unregistered trade mark can be enforced through the vehicle of “passing off”. To succeed in an action for passing off, the plaintiff must show that the defendant made a misrepresentation in the course of trade to prospective customers calculated to injure the business or goodwill of the plaintiff and that caused or was likely to cause the plaintiff damage.

Definition

Under Irish law, a “design” is defined as the appearance of the whole or part of a product resulting from the features of a product or its ornamentation, including the lines, contours, colour, shape, texture or materials of the product itself or its ornamentation. In order to be registerable, a design must be “new” and have “individual character”. Unregistered designs are also granted a level of protection under Irish law.

An EU regulation entered into force in November 2023 which requires member states to put in place a legal framework for geographical indication (GI) protection for craft and industrial products. The Regulation will apply from 1 December 2025. Ireland is required to enact implementing legislation in advance of this date.

Length of Protection

The total term of protection for designs under Irish law is 25 years, renewable at five-year intervals.

An unregistered design exists for three years from the date the design is first made available to the public within the EU, where the disclosure could reasonably have become known to those in the sector concerned, operating within the EU.

Registration

Designs are registered with the IPOI. An application for a Registered Community Design is made with the EUIPO.

Enforcement and Remedies

The reliefs available for industrial design infringement include damages, injunctions and orders for an account of profits.

An unregistered design does not confer a monopoly, unlike a registered design, and infringement can take place only if copying can be established.

Definition

Copyright is an intellectual property right which features mainly in but is not exclusive to the cultural, arts and information technology sectors. It is the legal form of protection used by the creators or authors of such works to protect the tangible form of all or part of their individual works. Irish law specifically recognises copyright in computer software as a literary work.

Length of Protection

The duration of copyright protection varies according to the format of the work.

• For literary, dramatic, musical and artistic works and original databases, copyright protection expires 70 years after the death of the author/creator.
• For films, copyright protection expires 70 years after the last to die out of: the director, the author of the screenplay, the author of the dialogue of the film, or the author of the music composed for use in the film.
• For sound recordings, copyright protection expires 50 years after the sound recording is made or, if the recording is made available to the public, then 70 years from the date it was made available to the public.
• Copyright protection for broadcasts ends 50 years after they are first transmitted.
• Copyright protection for computer-generated works ends 70 years after the date they are first made available to the public.

There are some exceptions under Irish law which reflect instances where the wider public interest, or the interests of particular groups, make it necessary to restrict or limit the rights granted to copyright owners.

Registration

There are no registration formalities in Ireland for obtaining copyright protection. Copyright arises automatically on the creation of an original work.

Enforcement and Remedies

Copyright in Ireland is enforced by way of both civil and criminal liability. Copyright holders may bring actions for damages, injunctive relief, search and seize orders, and orders for an account of profits. Infringements that may occur include:

• unauthorised copying of the work;
• performing the work;
• making the work available to the public; and
• adaptation of the work.

The District Court and the Circuit Court now have jurisdiction to determine intellectual property claims, including claims in relation to copyright infringement.

Databases

Irish law provides protection for both original databases and “non-original” databases where substantial investment has been incurred in obtaining, verifying or presenting the contents of the database. Original databases are those in which the contents constitute the original intellectual content of the author. The protections for databases under Irish law prevent the unlawful extraction or re-utilisation of a substantial part of the database.

Where a copyrighted work is included in a database, copyright will continue in that work and the separate database protections.

The protection of databases under Irish law expires 15 years from the end of the calendar year in which the making of the database was completed.

Trade Secrets

Irish law provides for the protection of trade secrets. Trade secret protection is afforded without registration and can last without limitation in time, generally as long as confidentiality is maintained. In order for something to qualify as a trade secret, it must satisfy three requirements.

• The information must not generally be known or readily accessible in the relevant industry.
• The information must have commercial value because it is secret.
• The information must be subject to reasonable steps, under the circumstances, to keep it secret.

Where a trade secret is unlawfully used, various remedies under Irish law, including injunctions, corrective measures such as recall or destruction of infringing goods and damages, are available to protect the trade secret owner. A person who contravenes or fails to comply with court orders commits an offence and is liable to a fine and/or imprisonment for up to six months.

The EU (Protection of Trade Secrets) Regulations 2018 gave effect to the EU Trade Secrets Directive and came into force on 9 June 2018 by way of SI No 188/2018. The Regulations provide civil remedies in circumstances where a trade secret is unlawfully used and allow for measures limiting access to court hearings and documents to ensure the confidentiality of trade secrets in court proceedings, including making it a criminal offence to contravene such measures.

Principal Data Protection Laws

The principal data protection legislation in Ireland is Regulation (EU) 2016/679 (the General Data Protection Regulation or GDPR), as supplemented by the Irish Data Protection Acts 1988 to 2018 (DPA) as amended.

Irish law-specific nuances, as permitted or required under the GDPR, are set out in the DPA. These include restrictions on processing personal data relating to criminal convictions and offences, the setting of the so-called digital age of consent, certain narrow derogations from data subject rights, and the administrative powers and procedures of the local supervisory authority, the Data Protection Commission.

The GDPR has general application to the processing of personal data in the EU, setting out extensive obligations on controllers and processors and providing strengthened protections for data subjects. The GDPR carries the potential for large fines of up to 4% of a firm’s worldwide annual turnover from the preceding financial year, or EUR20 million (whichever is higher).

In May 2023, the CJEU judgment of UI v Osterreichische Post AG (Case C-300/21) confirmed that a mere infringement of the GDPR does not give rise to the right to compensation in itself but that there must be a breach, some damage and a causal link between the two, as in most negligence cases. Claimants do have to prove damage of some kind in order to recover compensation for non-material loss following a GDPR infringement. The decision does not confirm what proof of non-material damage is required other than there is no threshold of seriousness and further consideration of this question is anticipated by the Irish courts.

On 10 January 2024, the Commercial Court awarded damages in Nolan & Ors v Dildar & Ors [2024] IEHC 4 despite no factual material or non-material damage being found. Damages were awarded “to mark the fact that their rights had been infringed”. The case arose from a breach in 2013 and the Court considered the scope of data controllers’ liability to data subjects for infringement of their rights under the 1988 and 2003 Data Protection Acts.

While the breach predated the GDPR and the Data Protection Act 2018, the judgment indicated the potential quantum and heads of damages that may be awarded to data subjects bringing compensation claims for damage suffered due to data protection violations under the new regime.

The European Commission is required to conduct a review of GDPR rules every four years and it is anticipated that the results of this review will be published in mid-2024. Major changes are not expected although the Commission will likely look at problematic areas identified, such as the exercise of Data Subject Access Requests, the applicability of GDPR to SMEs, and international data transfers.

Other Relevant Legislation

Ireland has transposed the ePrivacy Directive via SI No 336/2011 – European Communities (Electronic Communications Networks and Services) (Privacy and Electronic Communications) Regulations 2011 (the “ePrivacy Regulations”). The ePrivacy Regulations deal with security and data breach reporting obligations for certain telecommunications companies and, more generally, electronic direct marketing rules. The same implementing legislation addresses the local Irish requirements around obtaining consent for the use of cookies and similar technologies.

Social welfare legislation such as the Social Welfare Act 2005 strictly prohibits the use of the Irish Personal Public Services Number (PPSN) for purposes other than dealing with specified government bodies.

The GDPR applies to the processing of personal data by controllers and processors established in the EU (regardless of whether the processing itself takes place in the EU).

The GDPR also applies to controllers and processors not established in the EU, where the organisation’s processing activities involve either the offering of goods or services to data subjects in the EU or the monitoring of the behaviour of data subjects in the EU.

The Irish Data Protection Commission (DPC) is the independent authority responsible for enforcing the GDPR and the DPA in Ireland. The DPC has investigative powers to examine complaints from individuals in relation to potential infringements of data protection law and can order corrective measures where necessary. The DPC has extensive investigative and information-gathering powers.

The DPC co-operates with other European supervisory authorities and will act as the lead supervisory authority in respect of cross-border processing of personal data by organisations that have their main establishments (from a data processing perspective) in Ireland.

There have been a number of recent developments in Irish and EU law, with certain legislative reforms expected in the near future.

Digital Services Act (DSA)

The Digital Services Act (DSA) became EU law in November 2022 and the majority of its provisions became directly applicable in February 2024. Irish implementing legislation was enacted in February 2024. The DSA contains new rules ensuring greater accountability for online intermediary service providers and regulating how they moderate content, advertise and use algorithmic processes. The DSA imposed additional obligations on very large online platforms (VLOPs) and very large online service engines (VLOSEs) which have 45 million or more average monthly active recipients of the service in the EU.

Digital Markets Act (DMA)

The Digital Markets Act (DMA) became law on 1 November 2022 and the majority of its provisions became effective on those entities designated as “gatekeepers” in March 2024. The aim of the DMA is to ensure that large online platforms behave fairly in online environments and that digital markets are contestable by smaller players. The DMA established a set of narrowly defined objective criteria for qualifying a large online platform as a “gatekeeper”. Gatekeepers have a number of obligations, which include offering interoperability and ensuring that users have the right to unsubscribe from core platform services and to inform the European Commission of mergers and acquisitions (regardless of whether the relevant transaction is mandatorily notifiable).

Some other developments of note are summarised below.

Corporate Law

The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill is listed for priority publication on the summer 2024 government legislation programme. The general scheme has been published and contemplates reform in the areas of corporate governance, company law enforcement and supervision, administration and insolvency. On governance, in addition to addressing a number of technical issues arising from the Companies Act 2014, companies can expect to see virtual shareholder and creditor meetings put on a permanent statutory footing.

The Corporate Sustainability Reporting Directive ((EU) 2022/2464) (CSRD) had to be transposed into domestic law by 6 July 2024. Irish transposition measures are currently being formulated. CSRD will require in-scope companies to make ESG-related disclosures against common EU reporting standards. The first set of companies must report in 2025 based on 2024 data. An EU-wide audit requirement for reported sustainability information will apply, initially on a limited basis.

The proposed Corporate Sustainability Due Diligence Directive (CSDDD) was approved by the European Parliament in April 2024. CSDDD will subject those in-scope companies to due diligence obligations relating to human rights adverse impacts and environmental adverse impacts within their own operations, the operations of their subsidiaries and their “value chains” and impose liability for violations of it. CSDDD must be endorsed by the Council of the EU next and signed and published in the EU Official Journal.

Ireland will then have two years to transpose the new rules into national law and the obligations will apply on a phased basis.

Tax Law

Ireland plans to introduce a participation exemption for foreign dividends and distributions in 2025. In April 2024, the Department of Finance published its latest consultation document that included a strawman proposal setting out a potential approach to the key building blocks of the participation exemption. While this strawman proposal is not definitive of the final rules, it does indicate the current thinking of the Department of Finance.

These are some of the key points to note from the proposed strawman.

• In order to qualify for an exemption 5% shareholding must be satisfied for an uninterrupted period of 12 months up to the date of the dividend (dividends in respect of new shares may also qualify, if subsequently held for 12 months).
• Dividends received from companies resident in the EU/EEA or from companies in jurisdictions with which Ireland has a double tax agreement (DTA) will qualify.
• There will be no restriction to dividends derived from trading profits.
• Relief is proposed to be available in respect of dividends and distributions received in accounting periods commencing on or after 1 January 2025.
• The participation exemption will apply on an opt-in basis with an election required that applies for a three-year period.

A further feedback statement is expected in mid-2024 that should contain draft legislation. It is anticipated that the final legislation will be included in Ireland’s Finance Bill 2024 which is expected to be published in October.

Competition Law

The Competition (Amendment) Act 2022 which was signed into law in June 2022 and commenced on 27 September 2023, is expected to revolutionise the Irish competition regime. The Act implements the provisions of Directive 2019/1 (the “ECN+ Directive”), which seeks to harmonise the enforcement of EU competition law across the EU and bolster the enforcement powers of national competition authorities.

EU Foreign Direct Investment Screening Regulation

A new proposed EU Foreign Direct Investment Screening Regulation while unlikely to enter into force until 2026 at the earliest, would overhaul the current EU Regulation from 2019 by bolstering the requirements of national FDI screening regimes and enhancing cooperation and information sharing requirements amongst member states and the Commission.

Employment Law

Automatic Enrolment Retirement Savings Systems Bill 2024

Ireland is introducing a system of automatic enrolment for retirement savings. The draft legislation to implement this system, the Automatic Enrolment Retirement Savings System Bill 2024, was published in April 2024. Automatic enrolment will apply to all employees aged between 23 and 60, earning over EUR20,000 per annum and who are not members of qualifying occupational pension arrangements. Applying to annual earnings of up to EUR80,000, employers of in-scope employees will initially be required to make a contribution of 1.5% of an employee’s annual earnings, rising gradually to 6% by year 10 of the system being in place.

Other employer obligations include calculating, deducting and remitting employer and employee contributions. It is important to note that the automatic enrolment system operates on an opt-out basis, meaning that where employees meet the criteria, they will automatically be enrolled (with a right to opt out at defined, future points in time). Failure by an employer to fulfil certain duties under the system can be a criminal offence punishable by up to six months in prison and/or a fine of EUR5,000. The system is currently due to come into force on 1 January 2025.

Employment Permits Bill 2022

The Employment Permits Bill 2022 was introduced in October 2022 and aims to improve and modernise the employment permit system. The proposals include a new type of employment permit for seasonal workers, revision of the labour market needs test, allowing subcontractors to make use of the employment permit system and additional eligibility conditions for certain employment permits to be specified.

EU Pay Transparency Directive

The aim of the Directive is to promote greater pay transparency and fairness in the workplace and to reduce the gender pay gap within EU member states. The Directive introduces significant pay transparency obligations on employers to strengthen the application of the principle of equal pay. It came into force in June 2023, and Ireland has until June 2026 to implement the new rules. The government is currently seeking to transpose some of the requirements of the Directive via the Remuneration Information and Pay Transparency Bill 2023 which is currently going through the legislative process.

General Scheme of the Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024

The recently published General Scheme of the Employment (Restriction of Certain Mandatory Retirement Ages) Bill 2024 seeks to introduce measures which allow, but do not compel, an employee to stay in employment until pensionable age. The objective of the Bill is to align mandatory retirement ages in existing and future employment contracts with the state pension age of 66. The aim of the measure is to restrict the enforceability of mandatory clauses in employment contracts where the employee wishes to continue in employment.

Technology and Data Protection Law

ePrivacy Regulation

The European Commission issued a proposal for a Regulation on Privacy and Electronic Communications to replace the existing legislative framework in 2017. The aim of the new regulation is to reinforce trust and security in the digital world. This regulation would have direct effect across the EU member states. The most recent draft of this proposal was published in February 2021. The draft proposal provides for ePrivacy rules for all electronic communications including:

• rules that will apply to new forms of communication, not solely traditional telecoms operators;
• privacy will be guaranteed for communications content and metadata;
• streamlined rules regarding cookies; and
• protection against spam.

EU Data Act

The EU Data Act became law on 11 January 2024, and it will become applicable in September 2025. The Data Act is a key part of the European data strategy of 2020, alongside the Data Governance Act and EU General Data Protection Regulation (GDPR).

The overarching goal of the Data Act is to facilitate reliable and secure access to data, fostering its use in key economic sectors and areas of public interest, and to remove the power imbalance between providers and customers in the cloud market through increased transparency.

Key features include transparency requirements, regulation of smart contracts, interoperability, and new rules relating to virtual assistants, switching cloud services, and the Internet of things (IoT).

EU AI Act

The EU AI Act was endorsed by all member states in February 2024. The Official Journal of the EU was predicted to publish the Act between May and July 2024. The law will become applicable on a phased basis between late 2024 and summer 2027.

It imposes differing obligations according to the classification of the AI system, with four categories: (a) unacceptable risk (prohibited); (b) high-risk; (c) limited risk; and (d) minimal risk. The obligations on “Providers” and “Users” (business users rather than end-users) of AI systems range from transparency to risk management and data governance.