For Oral Answer on : 07/03/2023
Question Number(s): 85 Question Reference(s): 11382/23
Asked by: David Stanton T.D.
To ask the Minister for Finance the way his Department is working to encourage small Irish-based businesses to scale up in size using taxation strategy; and if he will make a statement on the matter.
My Department has introduced a number of taxation measures which support the scale-up of small businesses in Ireland, including: the section 486C relief for certain start-up companies; the Employment Investment Incentive (EII); the Key Employee Engagement Programme (KEEP); the Start-Up Relief for Entrepreneurs (SURE); and the Start-Up Capital Investment (SCI).
Finance Act 2008 introduced the section 486C relief for certain start-up companies, initially to apply in respect of the first three years of trading. Finance Act 2021 extended this relief to five years, for companies that commenced to trade from 1 January 2018 onwards. It provides relief from corporation tax to new start-up companies who have a corporation tax liability of less than €40,000 for an accounting year. Marginal relief is available for companies with a corporation tax liability of between €40,000 and €60,000, and the relief is also linked to employer’s PRSI liabilities of the company. The purpose of the relief is to encourage start-up companies in Ireland and thereby create additional employment and economic activity in the State. Promoting investment and jobs in Ireland is a key part of the Government’s overall strategy.
The Employment Investment Incentive (EII) provides an incentive for investment in certain SMEs. The EII provides tax relief for individuals who purchase qualifying trading company shares. The relief aims to encourage individuals to provide equity-based finance to trading companies, to assist companies to raise finance to allow them to expand and create or retain jobs.
The Key Employee Engagement Programme (KEEP) allows certain SMEs to engage key staff in a more cost efficient manner. The scheme is a focused share option programme, intended to help SMEs attract and retain talent in a highly competitive labour market.
The Start-Up Relief for Entrepreneurs (SURE) is a tax relief for entrepreneurs who leave an employment to set up their own company. It can provide a refund of income tax paid in previous years where the individual establishes a new trading company and invests cash through the purchase of shares.
The Start-Up Capital Investment (SCI) is a tax relief for early-stage micro companies to attract equity-based risk finance from family members.
Further information on these incentives is available on the Revenue website at www.revenue.ie.
In addition, my Department has begun initial work on a review of the personal tax system, taking account of the recent report of the Commission on Taxation and Welfare and considering a range of personal tax issues, including matters of relevance to sole traders and other non-corporate businesses. The review will involve a public consultation.