John Perry
Tax Partner | Legal
Ireland
John Perry
Tax Partner
Ireland
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Guide to tax on investment funds in Ireland
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Ireland’s tax neutral regime for globally distributed investment funds is one of the key growth drivers of the Irish funds industry.
Non-resident and exempt Irish investors are not subject to Irish tax on their investment and do not incur any withholding taxes on payments from the fund. For taxable Irish investors, the Finance Bill 2025 will reduce the rates of taxation that apply to investments in Irish domiciled funds and life assurance policies from 41% to 38%. It will also reduce the rates that apply to equivalent offshore funds and certain foreign life assurance policies.
Also a very welcome Dividend Withholding Tax Exemption for Investment Limited Partnerships and equivalent EU / EEA partnerships is being introduced in the Finance Bill 2025 to support opportunities for growth in the funds industry in Ireland, specifically in the private assets space.
In this guide, our Tax experts summarise Ireland’s tax regime for both domestic and foreign funds.
Our Dublin-based team advises clients across sectors on a full range of tax advisory and compliance services, including transaction tax structuring, due diligence and outsourced tax compliance across business tax, indirect and transfer taxes.
An overview of tax for Irish investment funds
Taxation regimes for domestic and offshore Irish collective investment vehicles
| Overview | Irish funds tax regime |
|
Regulated funds |
Domestic funds Irish collective investment vehicles which the Central Bank of Ireland authorise and regulate are taxed under the "gross roll-up" regime. The investment undertaking (or fund as defined) is generally exempt from tax on the profits it earns on behalf of its unit holders. Instead, those profits roll up within the fund until a “chargeable event" occurs. An exit tax is deducted by the investment undertaking when the chargeable event occurs. Certain unit holders are exempt from the exit tax, subject to a declaration procedure. Foreign funds There are two distinct parts to the taxation of offshore funds, depending on where the offshore fund is located:
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An overview of tax on Irish domestic funds
Key tax implications of the Irish domestic funds regime
| Overview | Irish domestic funds tax regime |
| Tax implications for domestic funds | Other than in respect of certain funds which hold interests in Irish real estate (or particular types of Irish real estate related assets), non-Irish investors are not subject to Irish tax on their investment and do not incur any withholding taxes on payments from the fund. |
| Tax implications for non-resident and Irish exempt investors | Non-resident and exempt Irish investors are not subject to Irish tax on their investment and do not incur any withholding taxes on payments from the fund. |
| Taxable investors in domestic funds |
The amount of exit tax to be deducted is calculated by applying a rate of tax to the gain arising on a chargeable event. Where exit tax is deducted by a fund, the deduction represents a final liability to Irish tax for unit holders who are individuals. In the case of Irish resident corporates who have suffered exit tax on payments, including redemptions, the amount received by the corporate is treated as a net annual payment, grossed up accordingly and taxed, with credit given for the tax withheld by the fund. A penal exit charge applies to a Personal Portfolio Investment Undertaking (PPIU). A PPIU is broadly a fund where the selection of the property of the fund was, or can be, influenced by the unit holder or certain connected persons. There is a deemed disposal every eight years. |
| VAT exemption | As provided under EU law, the provision of management, administration and custody services to an Irish regulated fund is exempt from Irish VAT. Other services, such as legal and accounting services, can result in an Irish VAT liability, but may be offset, depending on the fund’s VAT recovery position. |
An overview of tax on Irish foreign funds
Key tax implications of the offshore funds regime
| Overview | Offshore funds tax regime |
| Equivalent and non-equivalent offshore fund in EU / DTA | Where a person acquires a material interest in an “equivalent” offshore fund in the EU / EEA/ OECD, that person is a chargeable person for that period. This means that they must file a Form 11 / CT1 as appropriate and must include details of the offshore fund in that return. It should be noted that the onus is on the individual and not the offshore fund to make a return. An “equivalent” fund is one which is similar in all material respects to an Irish regulated fund, that is, the funds which are taxed under the “gross roll-up regime”. “Non-equivalent” funds essentially means any offshore fund located in the EU / EEA / OECD which is not an "equivalent" fund. |
| Offshore fund regime |
There are two distinct parts to the offshore funds’ regime, depending on where the offshore fund is located:
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| PPIU | A Personal Portfolio Investment Undertaking (PPIU) is a fund, either domestic or offshore, where the selection of the property of the fund was, or can be, influenced by an individual who is the investor. |
How Ogier can help
Ogier's Tax team works alongside its banking and finance, corporate and funds experts to support financial institutions, securitisations, asset backed special purpose companies and asset managers.
Our market-leading experience includes advising asset managers on the establishment of regulated fund platforms and the tax consequences of establishing various infrastructure debt and credit fund SPVs, both as standalone vehicles and within broader regulated fund structures.
Contact our team to find out more.
About Ogier
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
Disclaimer
This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.
Regulatory information can be found under Legal Notice
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