Doherty calls for end to “unfair” ETF tax

Fine Gael MEP Regina Doherty has called on the government to abolish the deemed disposal rule on Exchange Traded Funds.

Doherty described the ruling as “unfair stealth tax” on people who are “trying to do the right thing with their savings and start investing.”

Under the deemed disposal rule, Doherty explaiend tht “ordinary savers are hit with a 38% tax on their gains every eight years, even if they don’t sell or withdraw their money.”

“The same 38% rate applies when they eventually cash out. In effect, people are forced to pay tax on money they haven’t actually received – a huge disincentive to long-term investing,” she noted.

Doherty “Irish people are rightly trying to make their money work better for them by saving and investing for the future. Many choose simple, low-cost funds like ETFs. But under Irish rules, they’re hit with a 38% tax on their gains every eight years even if they don’t sell, and the same 38% again when they eventually cash out. That means people are taxed on paper gains they haven’t actually received. It simply isn’t fair and it needs to change.”

She said “if we are serious about helping families build wealth, plan for retirement and make their savings work harder, we have to remove the barriers that punish sensible investing. The Government says it wants a culture of saving and investment in Ireland, but you cannot encourage people to invest while hitting them with a tax like this.”

“I welcome the step taken in last year’s Budget after my calls to reduce the exit tax on ETFs, investment funds and life assurance policies from 41% to 38% from January 2026. That is progress and it shows the Government recognises the problem. But it simply doesn’t go far enough. We need to build on that change and go further by scrapping the deemed disposal rule altogether.

The Fine Gael MEP said “the government and the European Commission are rightly trying to make it easier for ordinary people to invest in a secure and accessible way to provide better financial security in the future. Currently €167 billion is sitting in low-yield Irish bank accounts, losing value every year. What better first step would there be than axing this unfair ETF tax? The government must make this a priority for 2026.”

“Irish people are already exploring investment options. It is estimated that up to 20% of people hold some kind of investment product, and this number is growing. For many, ETFs are an easy and affordable entry point, but they often don’t realise the tax threat coming down the line on money they haven’t even accessed. We need to modernise our rules so people can build real financial freedom and security. We should axe the ETF tax.”