The first ever in depth review of the Irish investment funds sector to be undertaken by Government has been published today. Prepared by the Department of Finance, Minister Jack Chambers said that the work is not complete, and that "many issues raised throughout the review will continue to analysed over the coming years".
Developments across the board in financial services and in financing of the economy are covered throughout this month's issue, at a time of growing momentum that thankfully is resulting in some good news on the global economic front, despite continued geopolitical trauma. The forthcoming mooted global cuts in interest rates (in addition to the most recent ECB cut), and evidence of easing inflation can hopefully begin to build optimism about the shape of 2025.
In advance of the publication of the Department of Finance Report over viewing the Irish investment funds industry 'Funds 2030' the latest issue contains a 'SWOT' analysis of the industry, analysing its current strengths, weaknesses, threats and opportunities. It is in the latest edition of the Finance Dublin Funds Monitor. It is a year that has already seen some very hopeful signs, including the early indications from ELTIF 2.0, the continued strength of NAVs in domiciled Irish funds, and proactive engagement with the regulator, the Central Bank of Ireland.
The Participation Exemption leads the way in Budget tax simplification effort. The much anticipated participation exemption regime for dividends was confirmed in the Budget with it set to come into effect from 1st January and is held up as highlight from Budget 2025 for increasing Ireland's attractiveness for international business.
This month's issues features the Finance Dublin Accountancy Survey 2024. The 14.7 p.c. growth rate in fee income over the past year recorded by Ireland Top 20 Accountancy firms is five times the expected rate of growth of overall GDP this year, and that makes the accountancy industry a leading contributor, and an asset in the continuing success of the Irish economy. The growth of their contribution to the Irish economy can be seen by comparing the industry today, as depicted in this year's 2024 survey, with what it was when we in Finance Dublin/Finance Magazine, published the first such survey in December 1987.
Most of the accountants and tax advisers in the firms covered in the Survey would have been dismayed by the recent Apple judgement - and we provide a perspective in this edition, in the Irish Tax Monitor, quoting the Taoiseach's views on the matter. In our editorial on this we express the point that it, as a judicial decision, is subjective. It is also wrong in our opinion, indeed unjust, to also use the somewhat emotive term used by the relevant Commissioner in her comments on the Judgement. The ruling says it was a sweetheart deal done by the Irish Revenue Commissioners. The very nature of the (distinct) Irish legal system means that the Irish Revenue never did sweetheart deals, as part of its modus operandum, and to insist they did is not just inappropriate for the highest European court to have ruled, but indeed potentially a stain on their reputation as well.
In this Special Budget 2025 Edition of the Irish Tax Monitor contributors give the main points from their firm's pre-Budget observations under the following headings: Investment Funds; Housing; SMEs/Private Business; Tax Simplification and FDI & Financial Services. The Department of Finance's second feedback statement on the Participation Exemption also features.
With a new political cycles beginning in the EU and ahead of elections in Ireland and the US, we assess the potential implications for Ireland's financial services industry. Already, change is signalled at EU level with the re-elected European Commission president signalling, in relation to the EU Green Deal, focus will shift to implementing existing laws rather than passing new ones.
We feature perspectives from thought leaders in the Irish industry on how the existing agenda is likely to be implemented, and to reflect on how it might change and evolve in the coming period. "Financial Services Regulation Review in the election year of 2024" provides a Symposium of views from 16 thought leaders on the critical regulatory issues for Irish FS, as the new electoral cycles begin both in Europe and at home in Ireland.
Also featuring in the issue are a number of assessments and observations on the Enria report on the McMenamin judgement of IFSAT. How this will roll out is seen as positive, expecially given the CBI's plans to implement the recommendations fully. This is also the topic of our editorial comment which says "The reassurance that now will flow from Governor Makhlouf's statements of acceptance of Enria's recommendations will be an important step in increasing confidence amongst international FS FDI investors about the Republic of Ireland as an investable jurisdiction".
Global, EU and national developments aimed at reducing the friction caused by the interaction of tax systems feature in this month's issue including the EU's FASTER proposal to improve the bloc's withholding tax procedures. Another EU plan, the Head Office Taxation system (HOT), aims to encourage SMEs to expand across borders by reducing the compliance burden caused by the EU's 27 national tax regimes. The OECD's BEPS, one major source of added tax complexity, also features, specifically in the areas of DTTs and Country by Country Reporting, while delays on agreement on certain aspects of BEPS is raising the risk of a proliferation of national digital services taxes.
The results of the June European and Local elections in Ireland, revealing that actual voting support for Sinn Fein at the ballot box was just 11% of the national poll, along with other revelations about political support levels feeds into an economic backdrop that points to relative financial and political stability in the context of heightened geopolitical instability in Europe and globally.
The report assesses the trends in and accuracy of political polling and actual results in the recent Irish elections, and points to a series of significant features that are now at play in the Irish political outlook in the short term preceding the next general election - in the wake of Budget 2025 (on October 1st) the election date potentially coming as soon as Friday November 8th, or 15th, and no later than March 2025.
Finance Dublin Yearbook 2024 - our annual publication that steps back and reviews the year past and 2024, and onwards, as it is evolving is published.
Already, despite the seismic changes underway in FS regulation we are looking to future developments, in an EU context as we look forward to an Irish EU Presidency in 2026, referenced in the interview in the Yearbook by newly appointed Financial Services Minister, Neale Richmond TD. It is a shop window of the industry referred to by Minister Richmond in his interview as follows: "what has been achieved in IFS is in many ways one of most successful partnerships between industry and Government in the history of Irish life".
These contextual changes are assessed in the Review and Outlook articles in the publication, featured here. This is just part of the evolving analysis that Finance Dublin delivers on a monthly basis.
The 2024 Yearbook profiles new entrants and updates the Finance Related Professional Services Guide of the Yearbook and the Directory sections to provide profiles of 538 companies and organisations and over 1,000 individual professionals and executives.
In this issue, as election news dominates in both of Ireland's nearest neighbours, and across the Atlantic in the USA, the cover feature provides a political and economic report on the state of the nation for the Republic, and what it means as Ireland enters the latter stages of its own election cycle, on foot of the momentouous European and Local Election results in the Republic of Ireland in June.
It concludes: 'the findings confirm indications that have been evident in the trends shown in opinion polls since late 2023 that the next election is the incumbent Government parties' to lose, and that a re-alignment of the centre parties Fianna Fail and Fine Gael (who together won over 50% of the seats in the local elections) in a coalition with independents or with smaller parties of the centre left is the likely political backdrop indicated in actual voting patterns, and, reflected in the trends identified in opinion polls.
The latest Irish Tax Monitor features a number of areas that are likely to be subject of changes in the Budget, which has been pulled in by one week to October 1st, such as the modernisation of business reliefs, the EIIS scheme and the participation exemption. A number of these areas are among the issues under consideration as signalled by the Taoiseach in his speech at the National Economic Dialogue.
In the latest issue: the 2024 Deals of the Year Awards, which celebrate the achievements of the Irish capital markets and corporate finance dealmaking and advisory community - detailed in 46 articles in the issue each profiling the deals that are recognised this year.
They show that despite the shifting market conditions, and increased uncertainty in the economic environment, the industry continues to show itself as adaptable and flexible, and capable of delivering the impressive achievements profiled in the report.
Elsewhere in the issue we look into the factors behind the leap for Dublin to 25th most important financial centre in an index ranking coveted by the top financial cities of the world, the Global Financial Centres Index of financial centres (GFCI).
Amongst these are the robust stability of the Irish economy, characterised by a surplus in the Exchequer - a not accidental situation that puts the Irish Government in a strong position ahead of the 2025 Budget, forthcoming, which will most likely be the last before the next general election. These are discussed in this month's editorial, and in articles in the Developments pages of the issue, and in the latest Irish Tax Monitor.
This month's issue the Roundtable looks ahead to Budget 2025, an election budget that could conceivably set the budgetary agenda for the next five years. The Tax Monitor's reviews of individual finance sectors continues this month with an article by BDO's Tatheer Fatma setting out an agenda for improving the tax framework for Securitisation in Ireland. Also the ITM discusses the various uncertainties in the area of global direct tax, citing
a discussion with Monique Pisters, head of tax at Grant Thornton Netherlands, and Sasha Kerins, international tax partner with Grant Thornton Ireland, which includes consideration of the UN's potential future role in international taxation.
In this issue the CBI's Fitness & Probity review process, recently put in place following the McMenamin 'AB' judgement. features prominently and in relation to this we express a hope that the review will take due account of the point made by legal adviser James Grennan that "our constitutional democracy protects fundamental rights to fair procedures and to earn a living".
On the bread and butter issue of earning a living, new Minister of State in the Department of Finance Neale Richmond has hit the ground running setting out an emphasis on the potential for jobs in the financial services industry, in Dublin and the regions, and, in a welcome new point for the official agenda, the potential of moving up the value chain for an IFSC that has now reached maturity, emphasising the potential for expanded 'front office' activity in the future mix for the industry.
That future mix is rich and varied, with many aspects emphasised in the latest Action Plan for the Ireland for Finance Strategy, recently published. This plan, is an agenda for state agencies in the main, and emphasises sustainability this year, alongside other key aims, and sits alongside other plans emanating from Government, most importantly in the year to come in the area of taxation and expenditure, referencing a 'whole of government' approach for SMEs, such as that outlined by Deloitte's Tatiana Kelly.
There is also the Department of Finance's Funds Industry review, now underway in earnest, and other submissions, such as that for a branded Irish SPE vehicle, which IDSA's CEO Gary Palmer speaks about.
This month's issue of the Irish Tax Monitor includes an assessment of the Department of Finance's Strawman proposal on the introduction of a participation exemption for foreign dividends, while tax policy enhancements to support Irish SMEs also feature. Roundtable topics include BEPS Pillar 2 and investment funds; share options; VAT on FS negotiation services; TAC determinations; ERR updates and aircraft leasing.
In the latest issue of Finance Dublin the strength in depth of Ireland as a financial services centre, serving capital markets that span the globe is vividly in evidence in this month's issue, which profiles in outline the 220 Deals that have been nominated for the Finance Dublin Deals of the Year 2024. The Awards, which will be announced in 2 months' time, will reflect the ever evolving markets that are covered in the five broad categories listed, including M&A, Debt and Equity Capital Markets, Financial Services and Loans and Financing, be it in banking or more broadly based credit origination.
Also in this issue: analysis of IFSAT's findings in AB and Central Bank of Ireland; the Commission's AML package; criminal enforcement of financial services law; Sustainable Banking, reform of SFDR; Ireland's new investment screening rules.
This month's issue analyses the fundamental changes in the taxation of financial services ushered in the Finance Act. Amongst these are changes Revenue's approach to the taxation of leasing, and the ramifications for Ireland aircraft leasing sector. Interest deductibility rules and the new concept of 'qualifying finance companies' introduced in the Act also feature. Further implications of a move to a territorial tax system are analysed as well as the concept of 'trading' in Irish tax law, which has implications for funds, insurance and the tax treatment of many other Irish corporate structures.
In the latest issue of Finance Dublin we feature the views of the newly incumbent Lord Mayor of the City of London Michael Mainelli who visited Dublin in a whirlwind series of meetings, including with the Taoiseach for an hour at the end of January, and in an interview in the issue he makes very clear that London will offer an open door to Dublin and its businesses as a financial centre - as a partner to the City's necessary new post-Brexit focus on a truly global role.
Also starting the year on the front foot are the Department of Finance who made their final pitch to secure for Ireland the HQ of AMLA, the proposed headquarters of the European Union's Anti Money laundering Authority. While the jury will be out on the siting for it until a scheduled decision on February 22nd, the mood music seems to be good as to the prospects of it coming to Ireland.
2024 brings with it 'a brand new tax system' as BEPS Pillar Two, which includes the introduction of a minimum tax rate for the world's largest corporates, enables a once-in-a-generation reform of Ireland's corporate tax regime. These BEPS reforms and further planned moves at EU level, such as 'Unshell' proposals, mean refinements to Ireland's tax offering will be required to remain competitive.
The Attorney General, speaking as part of the Ireland for Law series of events in North America in September drew parallels between the British, Irish and American legal systems in a scholarly address delivered at his old alma mater, the University of Michigan.
In it he said that, 'with the departure of the United Kingdom from the European Union we are now the only substantive common law jurisdiction left' and 'that means that there is less of a common law 'anglosphere' voice in the European Union and Ireland is going to have to speak more loudly to ensure that its voice and the common law tradition are heard and respected'.
The lecture at an alma mater of his reflects on the relationship between Ireland, the US and Europe, entitled 'Closer to Michigan or Madrid? Reflections on Ireland's Unique Geopolitical Position', a title that borrows from former Minister Mary Harney's oft-quoted observation that Ireland could be considered "closer to Boston than Berlin" in many respects.
