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Exit Tax in Ireland: How ETFs Are Taxed, and What Changes in 2027
ETF tax in Ireland works differently from almost everywhere else. You don't pay capital gains tax on ETFs: you pay exit tax, at 38% in 2026 and 35% from 1 January 2027. You also pay it every eight years whether you sell or not. Here's how it works, with the numbers.
Exit tax catches a lot of expats out. In many countries an index ETF is the simple, tax-efficient default. In Ireland, ETFs and most investment funds sit in their own tax regime, with a higher rate than shares, no loss relief and a tax bill on gains you haven't cashed in yet.
What exit tax is
In short: exit tax is the Irish tax on gains and income from investment funds, including most ETFs held by Irish residents. It's 38% in 2026 and 35% from 1 January 2027 (announced in Budget 2027, subject to the Finance Bill), with no USC or PRSI, no annual exemption and no loss relief.
Exit tax is the tax on profits from investment funds. It applies to Irish funds and to "equivalent" offshore funds based in the EU, the EEA or an OECD country with a tax treaty with Ireland. Revenue's offshore funds manual defines an equivalent fund as one "similar in all material respects to an Irish regulated fund", which includes UCITS funds. That covers UCITS ETFs domiciled in Ireland or in another EU country such as Luxembourg.
Instead of capital gains tax and your normal income tax rates, three things are taxed at the exit tax rate:
- Distributions: dividends the fund pays out to you.
- Disposals: the gain when you sell units.
- Deemed disposals: a gain worked out on every eighth anniversary of buying, as if you'd sold.
Revenue's guidance on ETFs confirms that ETFs are treated as investment funds and points to the funds rules for the detail.
Exit tax rates: 41%, 38% and 35%
In short: 38% for tax events in 2026, and 35% from 1 January 2027 as announced in Budget 2027, subject to the Finance Bill. From 2015 to 2025 it was 41%, so the rate has now been cut in two Budgets in a row:
| Period | Exit tax rate | Source |
|---|---|---|
| 2015 to 2025 | 41% | Revenue manual 27-04-01 |
| From 1 January 2026 | 38% | Revenue manual 27-01a-02, Finance Act 2025 |
| From 1 January 2027 | 35%, announced | Budget 2027 statement, subject to the Finance Bill |
Minister for Finance Simon Harris announced the 35% rate in his Budget 2027 statement: a reduction "from 38 percent to 35 percent from 1 January 2027" for investors in Irish and equivalent offshore funds and life assurance products. It still has to pass in the Finance Bill.
Two things don't apply on top. Revenue's guidance says USC and PRSI are not charged on these amounts. And if you hold a personal portfolio fund, one where you can influence which investments it holds, the rate is 60%, not 38%.
Deemed disposal: the 8-year rule
In short: on every eighth anniversary of each purchase, you pay exit tax on the gain so far as if you'd sold, even though you haven't. It isn't an extra tax: what you pay is credited when you finally sell, so in total you shouldn't pay more than the tax on your actual gain.
This is the part people don't expect. Technically, Revenue treats you as if you sold the holding and bought it back on each eighth anniversary, and the same happens again every eight years after that.
When you finally sell, the tax you already paid on deemed disposals is taken into account. Revenue's guidance says the combined tax should not exceed the tax on the actual disposal, which is worked out on your original cost.
If the fund falls in value after a deemed disposal, the tax you already paid is taken into account when you sell, so the total shouldn't exceed the tax on your actual gain. For Irish funds that deduct the tax themselves, Revenue's guidance says any overpayment is repaid to you. The catch is timing: nothing comes back until you sell.
Each purchase has its own clock. If you invest monthly, you get a deemed disposal every month, eight years later. That's why regular investors find the record-keeping the hardest part.
When you sell only part of a holding, Revenue's offshore funds manual says the gain is worked out on a first in, first out basis: the oldest units are treated as sold first.
The rule is still in place after Budget 2027. The Minister said the Government would "continue the work on the wider regime, including the rate of taxation, deemed disposal", but no end date has been announced.
A worked example
In short: €10,000 invested in January 2019, worth €17,000 at the eighth anniversary in January 2027, triggers a deemed disposal: €7,000 × 35% = €2,450 (assuming the announced 35% rate is enacted and still applies in 2030). Sold for €20,000 in January 2030, the tax on the full €10,000 gain is €3,500, less the €2,450 already paid. The total is unchanged; the timing is not. Model your own plan in the ETF exit tax calculator.
Say you invested €10,000 in a world index ETF in January 2019. By January 2027, its eighth anniversary, it's worth €17,000. In January 2030 you sell it for €20,000.
| Event | Gain | Rate | Exit tax |
|---|---|---|---|
| Deemed disposal, January 2027 | €17,000 − €10,000 = €7,000 | 35% | €2,450 |
| Sale, January 2030 (on original cost) | €20,000 − €10,000 = €10,000 | 35% | €3,500 |
| Less tax already paid | −€2,450 | ||
| Extra tax on the sale | €1,050 | ||
| Total exit tax | €3,500 |
The total is the same as if you'd paid once on the sale. What changes is timing: you paid €2,450 three years early, out of your own cash, on money that was still invested. This assumes the 35% rate is enacted and still applies in 2030.
Want your own numbers? Our ETF exit tax calculator handles a lump sum or monthly investing, lists every deemed disposal by tax year with its Form 11 deadline, and compares the same plan as shares or in the new Investment Account.
ETFs vs shares: why it matters
In short: the same gain usually costs more on an ETF than on individual shares. ETFs pay exit tax at 38% (35% from 2027) with no exemption or loss relief; shares pay capital gains tax at 31% from 7 October 2026 after a €1,270 yearly exemption, and losses can be offset. The difference adds up:
| ETFs and funds | Individual shares | |
|---|---|---|
| Tax on gains | 38% in 2026, 35% from 2027 (exit tax) | 31% from 7 October 2026, 33% before (CGT) |
| Annual exemption | Not part of the exit tax rules | €1,270 a year |
| Losses | Can't be used. Revenue: "no CGT or other loss relief is available" | Can be set against other gains |
| Tax without selling | Yes, every 8 years | No |
| Dividends | Exit tax rate, no USC or PRSI | Income tax at your marginal rate, plus USC and PRSI |
Using the same €10,000 gain, sold in 2030: on an ETF, €10,000 × 35% = €3,500. On shares, (€10,000 − €1,270) × 31% = €2,706.30. That's €793.70 less, before considering losses you could offset. Our capital gains tax calculator works out the shares side for you, and our capital gains tax guide explains the rules. How dividends on shares held through a foreign broker are taxed, including the US treaty credit, is in our guide to foreign dividends and interest.
That doesn't make shares the better choice for everyone. ETFs give you diversification in one purchase, and the right mix depends on your situation. It's a tax comparison, not investment advice.
Accumulating or distributing ETFs?
In short: both pay the same exit tax rate, at different times. Distributing ETFs are taxed on each payout in the year you receive it; accumulating ETFs are taxed only when you sell or reach an eight-year deemed disposal.
- Distributing ETFs pay dividends out to you. Each distribution is taxed at the exit tax rate in the year you receive it, so you file every year you get one.
- Accumulating ETFs reinvest the dividends inside the fund. Nothing is taxed until you sell or reach an eight-year anniversary, so more of your money stays invested in the meantime.
For someone building savings rather than living off the income, accumulating funds usually mean fewer tax events and less paperwork. If you need regular income, distributing funds give you cash, with tax due on it each year.
What about US-domiciled ETFs?
In short: US-domiciled ETFs used to be treated like shares by Revenue. Its ETF guidance says that earlier confirmation for ETFs domiciled in the USA, the EEA or OECD countries no longer applies from 1 January 2022, so check how any US ETF you hold is treated before you file.
Some investors used to buy US-domiciled ETFs, which Revenue once treated like shares. That changed. Revenue's ETF guidance says the earlier confirmation for ETFs domiciled in the USA, the EEA or OECD countries "does not apply to such investments with effect from 1 January 2022." If you hold US ETFs, check how they're treated before you file.
The new Irish Investment Account (from July 2027)
In short: Budget 2027 announced an Irish Investment Account opening on 1 July 2027: a €50,000 tax-free threshold, a flat 1% a year on the value above it, a maximum contribution of €12,000 a year, and no deemed disposal inside it. An account worth €80,000 would pay €300 a year. The detail depends on the Finance Bill.
Budget 2027 also announced an alternative. The Minister's statement sets out an Irish Investment Account with:
- a tax-free threshold of €50,000
- a flat tax of 1% a year on the value of the account above that
- a maximum contribution of €12,000 a year, with no minimum
- no deemed disposal on investments held inside it
- an opening date of 1 July 2027, to be legislated for in the Finance Bill
Example: if your account is worth €80,000, the yearly tax would be (€80,000 − €50,000) × 1% = €300. Details such as which providers offer it and exactly which investments qualify will depend on the Finance Bill. We'll update this guide when it's published.
Holding ETFs inside a pension
In short: ETFs held inside an Irish pension or PRSA are taxed under pension rules, not exit tax, so there is no exit tax or deemed disposal while the money stays in the pension. You get relief on contributions, but the money is usually locked until retirement age, and most withdrawals are taxed then.
ETFs held inside an Irish pension or PRSA fall under pension tax rules, which have their own exemptions in the Taxes Consolidation Act, rather than the exit tax rules. So there's no exit tax or deemed disposal while the money stays in the pension. You get tax relief on what you pay in, but you usually can't take the money out until retirement age, and most withdrawals are taxed then. Our guide to AVC and pension tax relief shows what the relief on contributions is worth.
What Revenue actually asks you to do
In short: if you hold ETFs through a broker, you declare them yourself on a Form 11, in the offshore funds section, for every year with a distribution, a sale or a deemed disposal. Being on PAYE doesn't change this, and nobody deducts the tax for you.
For most ETFs bought through a broker, nobody deducts exit tax for you.
Revenue's investment undertakings manual says that where units are held in a recognised clearing system, which is typically the case for ETFs bought through a broker, the investor "must self-assess and include details of income and gains in a timely filing on their income tax return." That applies to Irish-domiciled ETFs too: Revenue treats those payments as if they came from an offshore fund. For EU funds, the offshore funds manual is just as direct: "the onus is on the individual and not the offshore fund to make a return."
- File a Form 11 for every year in which you receive a distribution, sell units, or reach an eight-year anniversary. Being a PAYE employee doesn't change this. The myAccount Form 12 has no section for offshore funds, which is why Revenue's guidance points to Form 11.
- Include the fund in the offshore funds section of the return, the one headed "Offshore Funds (Part 27 Ch 4)".
- Pay on time. Exit tax on a 2027 event is part of your 2027 tax. Under Revenue's self-assessment rules, the Form 11 and the balance are due by 31 October 2028, and if you're registered for self-assessment you also pay preliminary tax for 2027 by 31 October 2027. Revenue explains who has to register.
- Keep a record of every purchase: date, number of units and cost. You need it to work out each deemed disposal and your final gain.
The Ireland tax calendar lists the other key dates.
If you're moving to or leaving Ireland
Exit tax follows your Irish tax residence. If you arrived with a portfolio of ETFs, or you're planning to leave with one, the timing of purchases, sales and your residence dates can change what you owe in each country. Our guides to moving to Ireland and leaving Ireland cover the wider picture, and it's worth getting advice before you sell.
Get your exit tax right
Exit tax is easy to underpay by accident, especially once deemed disposals start falling due. Start with the exit tax calculator to see your dates. If you hold ETFs or funds, message us on WhatsApp. We'll check what you owe, list your eight-year dates and file it on your Form 11 through our CGT Review service.
Related reading
Questions we get asked
What is the exit tax rate in Ireland?
38% for 2026. Budget 2027 announced a cut to 35% from 1 January 2027, subject to the Finance Bill. Before 2026 the rate was 41%. Personal portfolio funds pay 60%.
Do I pay exit tax if I don't sell my ETF?
Yes, every eight years. On each eighth anniversary of a purchase you pay exit tax on the gain so far. That tax is credited when you eventually sell.
Can I offset ETF losses against my gains?
No. Revenue's guidance says that where a loss arises on disposing of an interest in an offshore fund, no CGT or other loss relief is available.
Do I pay USC and PRSI on ETF gains?
No. Revenue's guidance says USC and PRSI are not charged on these amounts. You pay only the exit tax rate.
Can I declare ETF income on a Form 12 instead of a Form 11?
Revenue's guidance tells you to report it on Form 11, in the offshore funds section. The myAccount Form 12 has no section for offshore funds, so a PAYE employee with ETFs normally files a Form 11 for each year with a distribution, a sale or a deemed disposal.