Irish tax law is not short on rules. What it is short on is explanation.
The Tax Consolidation Act sits at the centre of Ireland’s tax system, yet most people only encounter it indirectly—through a payslip, a Revenue letter, or an accountant’s email that references a section number without context. The law itself is dense, technical, and written for courts, not for everyday taxpayers.
That gap is the reason this guide exists.
This article explains the Taxes Consolidation Act 1997 (TCA 1997) in clear, practical language, updated for 2026. It shows how the Act actually works, how Finance Acts change it each year, which sections matter most in real life, and where people commonly get tripped up. It is designed for employees, freelancers, landlords, business owners, and directors who want understanding—not legal theory.
What Is the Tax Consolidation Act?
The Taxes Consolidation Act 1997 is the main piece of legislation governing direct taxes in Ireland.
It does not introduce new taxes. Instead, it:
Brings decades of tax law into one framework
Sets the legal rules for:
- Income tax
- Corporation tax
- Capital gains tax
Acts as the foundation that Finance Acts are amended every year
A simple way to understand it:
The TCA is the operating system.
Each Finance Act is a yearly update.
The system stays the same. The rules around rates, thresholds, reliefs, and credits change.
Who the Tax Consolidation Act Applies To
It Applies To:
- Irish tax residents
- Non-residents with Irish-source income
- Employees under PAYE
- Freelancers and contractors
- Landlords
- Companies trading in Ireland
It Does Not Directly Apply To:
- UK-only taxpayers
- VAT (covered by the VAT Consolidation Act 2010)
- PRSI and social welfare contributions (separate Social Welfare legislation)
Important: Despite the generic name, the Tax Consolidation Act is Irish law only. It has no application in the UK, even though search results often blur the distinction.
How Irish Tax Law Works in Practice
Irish tax law operates in three layers:
| Layer | What it does |
|---|---|
| Taxes Consolidation Act 1997 | Core legal rules |
| Annual Finance Acts | Change rates, thresholds, and reliefs |
| Revenue guidance | Explains Revenue’s interpretation |
Revenue guidance is helpful. It is not the law.
When there is a conflict, the Act takes priority.
Key Sections of the Tax Consolidation Act (Explained Simply)
Most people only ever need a small part of the Act.
Section 15 – What Counts as Taxable Income
Defines what income is chargeable to tax in Ireland.
Sections 819 & 820 – Tax Residence and Ordinary Residence
These sections decide:
- Whether you are an Irish tax resident
- Whether Ireland can tax your worldwide income
They matter for:
- Remote workers
- Expats
- Anyone with foreign income
Section 458 – Personal Tax Credits
Sets the structure for personal, PAYE, and employee tax credits.
Section 997A – PAYE Obligations
Governs employer responsibilities under PAYE.
Section 604A – Capital Gains Tax Reliefs
Applies to specific CGT reliefs, often relevant for property or business disposals.
Section 372 – Corporation Tax Computation
Defines how companies calculate taxable profits.
Section 523 – Professional Services Withholding Tax (PSWT)
Requires certain public bodies and state-linked entities to withhold tax when paying for professional services.
This is a compliance mechanism, not a tax rate.
If you are a doctor, engineer, consultant, or accountant working for a public body, Section 523 is why 20% of your invoice may be withheld before payment.
Tax Consolidation Act vs Finance Act
| Feature | TCA 1997 | Finance Act |
|---|---|---|
| Purpose | Core tax law | Annual changes |
| Frequency | Standing legislation | Passed yearly |
| Content | Structural rules | Rates, credits, reliefs |
| Lifespan | Long-term | Year-specific |
The TCA tells you how tax works.
The Finance Act tells you what applies this year.
A Real-World Example: Why the TCA Matters
Scenario:
A freelance consultant earns €85,000 and assumes PAYE-style rules apply.
What the TCA actually determines:
- Whether income is from employment or trading income
- Which expenses are deductible
- Whether preliminary tax applies
- Exposure to surcharges and interest
Getting this wrong can mean paying too much tax—or paying it twice.
PRSI note (important):
PRSI is governed by Social Welfare legislation, not the TCA.
However, the employee PRSI rate increased to 4.35% in October 2026, which directly affects take-home pay calculations.
Businesses: Major 2026 Changes Inside the TCA
Pillar Two – Global Minimum Tax
Ireland has now embedded OECD Pillar Two rules into the TCA.
- Introduces a 15% global minimum effective tax rate
- Applies to multinational groups with revenue over €750m
- Implemented through amendments to the corporation tax sections
For most SMEs, this changes nothing.
For large groups, it fundamentally alters how corporate tax is calculated.
Also Read: Stamp Duty Land Tax Return 2026: How to File, Rates & Deadlines
R&D Tax Credit (2026 Update)
From 1 January 2026:
- The R&D Tax Credit increased from 30% to 35%
- Amended via the Finance Act 2025 and embedded into the TCA
This significantly improves cash-flow benefits for qualifying companies.
Revised Entrepreneur Relief
As of 1 January 2026:
- Lifetime limit increased from €1m to €1.5m
- Applies under Section 597AA
This matters for founders planning an exit.
Crypto-Asset Reporting Framework (CARF)
2026 is the first full year of Crypto-Asset Reporting Framework compliance.
- New TCA sections require crypto service providers to report transactions to Revenue
- Aimed at transparency, not new crypto taxes
- Affects platforms first, users indirectly
Common Mistakes People Make
- Reading the TCA without checking the Finance Act amendments
- Confusing VAT law with income tax law
- Assuming Revenue guidance overrides legislation
- Ignoring residency rules for foreign income
- Treating PSWT as a “tax rate” instead of a withholding obligation
2026 Compliance Focus Areas
Revenue enforcement priorities in 2026 include:
- Rental income reporting
- Foreign income disclosure
- Contractor classification
- Digital records and data matching
The law has not radically changed. Enforcement has.
Practical Cheat Sheet
Use the Tax Consolidation Act when you need to:
- Understand how income is taxed
- Check eligibility for reliefs
- Clarify residency or source rules
Do not use it for:
- VAT calculations
- PRSI rates
- UK tax obligations
FAQs
Q. What is the Taxes Consolidation Act 1997?
The Taxes Consolidation Act 1997 (TCA 1997) is Ireland’s main tax law. It sets out the legal rules for income tax, corporation tax, and capital gains tax, and acts as the foundation of the Irish tax system.
Q. Is the Tax Consolidation Act still valid in 2026?
Yes. The Tax Consolidation Act is fully valid in 2026. It continues to apply as amended each year by Finance Acts, which update tax rates, credits, and reliefs without replacing the core legislation.
Q. Does the Tax Consolidation Act apply in the UK?
No. The Tax Consolidation Act applies only in Ireland. It has no legal effect in the UK, which operates under separate UK tax legislation.
Q. Is VAT covered under the Tax Consolidation Act?
No. Value-Added Tax (VAT) is not covered by the Tax Consolidation Act. VAT in Ireland is governed by the VAT Consolidation Act 2010, which is separate legislation.
Q. What is Section 523 of the Taxes Consolidation Act?
Section 523 of the TCA 1997 governs Professional Services Withholding Tax (PSWT). It requires certain public bodies and state-linked entities to withhold tax from payments made for professional services. PSWT is a withholding mechanism, not a tax rate or relief.
Conclusion
The Tax Consolidation Act was never written to be approachable. Yet it remains the foundation of Irish tax law. Understanding how it works—and how Finance Acts modify it—gives you context that guidance notes alone cannot.
You do not need to read the entire Act. You do need to know which sections matter, when updates apply, and where professional advice becomes necessary. Used properly, the TCA is not a barrier. It is a reference point that helps you make informed decisions in a complex tax system.
