Irish Revenue and Department of Finance launch eWHT consultation

Introduction and scope of eWHT

Ireland’s withholding tax system is in need of modernisation to bring it in line with other European countries. Digital platforms are reshaping the landscape in how goods and services are exchanged, putting further demands on tax systems and administrations to keep up with the evolving landscape. Each year more taxpayers are earning income through digital platforms and the Revenue Commissioners of Ireland (“Irish Revenue”) need to modernise their systems and administrations to achieve effective tax compliance. 

The Minister for Finance in his Budget speech in October 2025 stated that withholding taxes are an important feature of our tax system, the scope of which needs to be modernised, digitised and expanded. On 5 December 2025, Irish Revenue and the Department of Finance announced the commencement of a joint public consultation on the modernisation of withholding taxes in Ireland. As part of this process, input will from sought from businesses, taxpayers, tax agents, software providers, business associations, representative bodies and other stakeholders in respect of:

• the modernisation of professional services withholding tax (“PSWT”) and relevant contracts tax (“RCT”);
• expansion of a withholding tax to the platform economy; and
• the introduction of personalised deduction rates (“PDR”) in a new modernised withholding tax regime for self-employed workers.

Tax regime in respect of RCT & PSWT

RCT and PSWT are the two main withholding taxes in Ireland outside of the ‘pay as you earn’ (“PAYE”) system. Currently, there is no seamless connection between businesses systems and Irish Revenue’s system to support real time reporting and withholding. Both regimes operate effectively, however, the introduction of eWHT would offer the potential to significantly streamline this process as the new system will link the business system with Irish Revenue’s systems which should mean fewer under or overpayments, less paperwork and more certainty and an overall improvement in terms of tax compliance. With eWHT, taxpayers are more likely to pay the correct amount of tax at the correct time and the overall administrative and compliance burden should be reduced.

Tax regime for self-employed workers

Under the current system, self-employed workers are required to save as they go and pay a lump sum payment of their income tax and preliminary liabilities once a year, requiring increased financial planning and an understanding of the pay and file process. In contrast with a PAYE worker, a self-employed worker typically experiences an administrative burden as well as tax uncertainty and the possibilities of over or underpayments of tax. Irish Revenue are also proposing to streamline this process by developing a system where tax on income is calculated and paid seamlessly in a similar manner to the current experience of a PAYE worker.

Objective of eWHT

The objective behind the modernisation of the withholding tax system is to:

• enhance efficiency by simplifying the processes and reducing the administrative burden;
• build trust and create a cooperative relationship with taxpayers;
• improve compliance by reducing costs associated with tax obligations;
• collect the correct taxes at the right time efficiently and effectively;
• support economic growth and competitiveness through system design that will integrate with business systems;
• strengthen data management and analytics by digitising processes and systems to track, analyse, and cross-check taxpayer data;
• provide a user-friendly and accessible experience for individuals and businesses;
• align with international standards;
• facilitate information exchange to combat tax evasion/avoidance across borders;
• align with DAC7, OECD and global initiatives; and
• deliver a single, scalable, and future proofed system that enables real-time reporting, simplified compliance, and accurate tax collection.

Consultation process

In conclusion, digital technology provides a valuable opportunity to modernise withholding tax administration by streamlining compliance and integrating it with business systems. This modernisation aims to reduce compliance costs and improve efficiency for businesses while enabling Irish Revenue to collect the correct taxes more effectively and leaving Irish Revenue with more resources to focus on non-compliance. All stakeholders, including tax and duty professionals, are encouraged to provide feedback via the eWHT consultation hub (which can be accessed here) on by 30 January 2026.