In addition to the proposed updates to investment and life assurance products, Finance (No.2) Bill 2026 contains a focused set of measures for the financial services sector.
The headline change is the proposed extension of the bank levy to 2027, while the Bill also recasts amendments to the health insurance levy and corrects minor drafting errors in the rules implementing the Crypto-Asset Reporting Framework and DAC 8.
The Bill extends the bank levy for one further year. Under current law, the levy applies to specified financial institutions (being AIB, EBS, Permanent TSB and Bank of Ireland) for the years 2024 to 2026. The proposed change extends the levy to include 2027, in line with the announcement made on Budget Day.
For 2027, the levy will apply in the same manner as 2026, i.e., at a rate of 0.1025% to the value of deposits held by each in-scope bank at 31 December 2024 to the extent such deposits are classified as “eligible deposits” under the European Union (Deposit Guarantee Schemes) Regulations 2015. The intended scope of the levy and its expected yield of €200 million remain unchanged.
The immediate commercial implication is continuity rather than redesign. The same institutions remain within scope, and the target yield does not change. The use of a fixed historic deposit reference date should also provide a defined basis for calculating the 2027 charge.
However, extending a measure that was due to end in 2026 means the affected banks must account for an additional year of cost. The bank levy has been in place in various forms since 2013 and has been extended year-on-year since 2023.
The Bill proposes to repeal changes made by Finance Act 2025 that were due to apply from 1 April 2027. Those amendments are re-enacted in Finance (No. 2) Bill 2026 with adjustments intended to ensure that the provisions operate as planned.
The approach is therefore not to abandon the 2025 reforms, but to replace them before they take effect. There is no change to the date these amendments come into operation, i.e. these amendments come into operation on 1 April 2027.
The health insurance levy is charged through stamp duty on certain health insurance contracts entered into or renewed during each quarterly accounting period (being the consecutive three-month periods commencing on 1 January, 1 April, 1 July and 1 October annually).
The insurer is responsible for paying the levy. Under the current applicable rules, the calculation refers to the age of each insured person on the first day of the accounting period in which the contract is entered into or renewed.
The Bill proposes to change that reference point. The levy would instead be calculated by reference to the insured person’s age on the actual date the contract is entered into or renewed (rather than their age on the first day of the corresponding accounting period). This aligns the age test more directly with the individual contract event.
For insurers, the change may require systems and controls to use the contract / renewal date, rather than the first day of the quarterly accounting period, when determining the applicable amount.
A further amendment has benefits for insurers by addressing policies that end within 12 months of the date on which the contract was entered into or renewed.
Where an insured person’s cover ceases within this period, the insurer may claim a partial repayment of the stamp duty paid for that person in respect of that policy. The repayment is to be calculated by reference to the number of days remaining in the 12 month period.
The Bill also makes changes to the Irish rules for the Crypto-Asset Reporting Framework (CARF) and DAC 8. CARF / DAC 8 provide for tax information on crypto-asset transactions to be reported in a standardised form and exchanged automatically between tax authorities.
The changes described in the Bill are limited to correcting a minor drafting error in each section. The corrections are deemed to have come into operation from 1 January 2026.
The financial services measures in Finance (No. 2) Bill 2026 are targeted, but they require attention from the affected businesses. In-scope banks should plan for the 2027 levy and confirm the deposit base used in the calculation.
Health insurers should prepare for the 1 April 2027 changes to the age reference date and the new partial repayment process.
The final enacted provisions and any supporting Revenue guidance should be monitored. The Bill provides continuity in some areas and technical repair in others, with nuance in the relevant developments such that close consideration should be given to the integration of these changes into day-to-day business operations.
The measures unveiled in Finance (No.2) Bill 2026 will have far-reaching implications for businesses across Ireland. If you have any enquiries, comments, or wish to explore further, we are here to assist.
Contact Conor McElhinney of our Tax team today.
