Irish Revenue’s 2025 Annual Report offers useful signals for taxpayers and advisers. Behind the headline numbers, it points to a tax authority that is increasingly data-led, internationally connected and, as you would expect, remains firmly focused on compliance. Here are the points that stood out for us.
Audit and compliance activity
Irish compliance rates remain impressively high: 99% for large and medium taxpayers and 93% for all other taxpayers. It appears from the report that, in this context, “compliance” refers to the on-time filing of tax returns rather than their accuracy. That better explains the scale of Revenue’s enforcement activity, with 237,550 audit and compliance interventions completed in 2025 yielding €734 million.
Tax avoidance featured prominently in Revenue’s compliance interventions. Revenue closed 189 tax avoidance cases during the year, yielding €41.7 million, and ended 2025 with a further 130 cases under active challenge. The report indicates that those cases involve:
- claims for relief from tax on chargeable gains where either Revenue believes the relief is inappropriately claimed or not all conditions are satisfied;
- transactions by individuals involving the transfer of assets abroad; and
- share sale transactions between individuals and connected companies that Revenue perceive as cash extraction.
The report also highlights the practical fallout from the Supreme Court’s decision in Revenue Commissioners v Karshan (Midlands) Ltd (t/a Domino’s Pizza) [2023] IESC 24. In that case, the Supreme Court established a five step test to determine whether a person is an employee or self-employed. Following the decision, Revenue opened a disclosure facility for taxpayers who may have treated individuals as self-employed contractors rather than employees. That facility closed in January 2026 with 286 disclosures made.
Transfer pricing and international disputes
Revenue’s competent authority had a busy year, concluding 54 mutual agreement procedures (22 transfer pricing and 32 non-transfer pricing) and 12 advance pricing agreements.
In domestic audits, transfer pricing remains a high priority and high-value area of focus. Meaningful activity in this space began ten years ago and in that time, Revenue has initiated 73 transfer pricing compliance interventions, 55 of which have been finalised, yielding €824 million (which includes €246 million in interest and penalties) and a restriction in trading losses of over €1 billion (representing a corporation tax increase of €136 million).
In addition, amended corporation tax assessments were raised seeking increased tax payments of €52 million as a result of transfer pricing adjustments. The report notes that the majority of those assessments are currently under appeal. In our experience, the majority of Irish transfer pricing assessments tend to be settled, that said, we may see some of these cases making their way through the tax appeals process during the course of 2026 and 2027.
We have issued another insight that examines the activity of the Irish competent authority along with other relevant parts of the report for MNEs.
Use of technology
One of the more interesting parts of the report is the insight it gives into how Revenue is using technology. In 2025, it used data analytics to map relationships between taxpayers through network graph modelling and to analyse filing behaviour across corporation tax and self-assessed income tax returns, and to develop tools to help decide how service contracts should be treated for tax purposes (e.g., whether a contract is a contract of employment). The clear direction of travel is towards more data-driven risk identification.
The report also outlines how Revenue is using AI. While AI is not being used to make assessments or decisions, it is being used to automate internal processes, including the screening of cases and the flagging of issues. Revenue has also launched a large language model sandbox to assist with tasks such as document summarisation and idea generation. No other detail is included on the idea generation aspect of that work.
Revenue’s four-legged frontline
One section of the report garnered attention from the animal-lovers here at Matheson: the overview of the K9 programme, Revenue’s specialised enforcement unit that uses highly trained detector dogs to target smuggling, organised crime, and illicit trade. We were especially pleased to read about detector dog Jack who was nominated for the 2025 Golden Paw Hero Dog Awards. It just goes to show, in the world of tax enforcement, sometimes the real heroes have four paws and a nose for trouble.
Concluding comment
The report demonstrates that Revenue continues to enhance its capabilities in tax administration, particularly through its use of technology, analytics, and targeted enforcement. As these approaches evolve, Irish taxpayers should ensure that transactions are accurately documented so that they are well-prepared to defend the positions they have taken.
Contact us
Should you have any questions or wish to discuss any aspect of Revenue’s Annual Report in more detail, please speak to any of our Tax partners or to your usual Matheson contact.