On Tuesday (7 October), Ministers Paschal Donohoe and Jack Chambers delivered Budget 2026, a €9.4 billion package designed as a deliberate fiscal reset. The budget pivots away from short-term stimulus to instead prioritise long-term business competitiveness and resilience, aiming to safeguard jobs by strengthening the core fundamentals that sustain enterprise: innovation, infrastructure, and talent. However, households may see limited disposable income gains.
Enterprise and innovation
At the heart of the pro-business agenda is a significant boost to the Research and Development (R&D) tax credit, rising from 30% to 35%. This move signals the Government’s determination to maintain Ireland’s attractiveness as a global hub for innovation. The first-year payment threshold has also increased from €75,000 to €87,500, offering stronger support for smaller and early-stage projects.
A forthcoming “R&D Compass” will guide further reform of innovation supports, ensuring policy keeps pace with industry practices around outsourcing and qualifying expenditure. Enterprise Ireland and IDA Ireland will both receive additional funding to help Irish firms scale globally and attract high-value foreign investment, while Local Enterprise Offices will expand regional business supports.
In addition, the establishment of a National Artificial Intelligence Office will promote the safe and transparent adoption of AI across sectors, reflecting the government’s commitment to future-focused competitiveness.
Tax and regulatory framework
Budget 2026 introduces several measures to simplify and modernise business taxation. Updates to the participation exemption for foreign dividends will expand Ireland’s appeal for multinational headquarters, while planned reforms to the interest deductibility regime aim to make the tax system more transparent and internationally competitive.
The Special Assignee Relief Programme (SARP), a key incentive for attracting global talent, has been extended for five years, with the qualifying income threshold increased to €125,000 to keep the scheme balanced and targeted.
Infrastructure and competitiveness
Ireland’s long-term competitiveness depends on reliable infrastructure, and the Government has committed record capital investment through the National Development Plan. Key allocations include €4.7 billion for transport, €3.5 billion for energy infrastructure, and €1.4 billion for water services. Projects such as DART+, BusConnects, the Cork Commuter Rail, and the National Broadband Plan will enhance regional connectivity, support housing delivery, and strengthen business productivity nationwide.
A forthcoming action plan will also reform the delivery of public infrastructure, addressing delays in planning, consenting, and regulatory processes that have hindered development.
Talent and skills
Recognising that human capital underpins innovation, the Budget allocates nearly €5 billion to the Department of Further and Higher Education. This includes expanded apprenticeships, research funding, and targeted capital investment in higher education infrastructure. Automatic pension enrolment, due to begin in January 2026, will enhance long-term income security for 750,000 workers, improving financial resilience and workforce stability.
Conclusion
Budget 2026 is not a populist package, but a disciplined one. For enterprise, it strengthens the pillars that sustain Ireland’s success: competitive taxation, innovation incentives, world-class infrastructure, and skilled talent. In an era of global uncertainty, it positions Ireland as a stable, forward-looking economy committed to sustainable growth and high-value enterprise.
