The provisional contents of the 2027 Tax Plan package provide an initial insight into the forthcoming changes. The Tax Plan 2027 package comprises four legislative proposals, including the Tax Plan 2027 itself and the legislative proposal on Other Tax Measures 2027, which contains technical amendments with no budgetary implications. In addition, there are bills on safe-harbour rules under the Minimum Tax Act 2024 and tax incentives for start-ups and scale-ups.
Transfer tax and VAT
The transfer tax for private investors will fall from 8% to 7% with effect from 1 January 2027 for properties in which the purchaser does not intend to live on a long-term basis. There will also be a new exemption from transfer tax for housing associations transferring DAEB properties to one another. The reduced VAT rate for ornamental horticultural products will rise from 9% to the standard VAT rate of 21% with effect from 1 January 2028.
Tax deductions and excise duties
The tax relief on specific healthcare expenses will be abolished from 2028. The starter’s allowance will be reduced from 1 January 2027 and abolished entirely from 1 January 2028. The tax-free travel allowance will increase by €0.02 to €0.25 per kilometre, with retroactive effect from 1 January 2026. The reduction in fuel duty on petrol will be extended in 2027, after which the standard rate will apply again from 1 January 2028. From 2027, alcohol duties will be indexed annually.
Tax incentives and other measures
The deduction rate for the energy investment allowance (EIA) will be increased from 40% to 45.5% with effect from 1 January 2027. The tax treatment of foreign exchange gains and losses on hedging instruments under the participation exemption will be adjusted to eliminate imbalances. The excise duty refund scheme for biofuels and renewable fuels will be discontinued with effect from 1 January 2027.