Industry bodies across various sectors have, for many years, articulated a need for Ireland to introduce a form of dividend participation exemption into its tax code to sit alongside the existing capital gains participation exemption. The introduction of such an exemption represents a culmination of this ongoing dialogue and consultation between stakeholders and Ireland’s Department of Finance. This measure aims to enhance Ireland’s holding company regime by exempting qualifying foreign dividends from Irish corporation tax in the hands of the Irish recipient company. The addition of a dividend participation exemption to Ireland’s tax code is an important development, further enhancing Ireland’s position as a leading jurisdiction for private market investment structures. Although the scope of this exemption is presently limited to E.U./European Economic Area countries and treaty jurisdictions, it marks a significant advancement in addressing complex double-taxation issues and simplifying compliance for cross-border operations. This guest article by Shane Geraghty, partner at K&L Gates in Dublin, and Patrick McClafferty, partner, and Elaine Butler, senior manager, at Nexus Taxation explains how the dividend participation exemption operates; its practical implications and benefits; the eligibility requirements; the implementation and compliance considerations; and the strategic implications for asset managers. See “Ireland’s Department of Finance Issues Recommendations for Funds Sector” (Dec. 5, 2024).