Joe Flaherty
Question:113. Deputy Joe Flaherty asked the Minister for Finance if he will review the tax incentives for the SME sector; and if he will make a statement on the matter. [4442/24]
View answerThursday, 1 February 2024
Questions (113)
Written answers
SMEs are the foundation of the Irish economy, accounting for the majority of employment in the State. Their vital importance to our economy is reflected in our Programme for Government commitments.
The tax system contains a number of incentives and reliefs designed to support SMEs and since taking office I have been proactive in both reviewing these measures and introducing targeted new supports.
For example, taxation measures which help small businesses to access investment, scale-up and expand include the Employment Investment Incentive (EII), the Key Employee Engagement Programme (KEEP), the Revised Entrepreneur Relief and the new relief targeting angel investors. These tax incentives have undergone significant change in recent years following feedback from stakeholders, including in particular the SME community.
The Start-Up Relief for Entrepreneurs (SURE) and the Start-Up Capital Incentive (SCI) are also designed to assist new companies with early-stage funding, and the section 486C relief for certain start-up companies provides relief from corporation tax in respect of the first five years of trading for companies with an annual tax liability of less than €60,000. The purpose of the reliefs is to encourage start-up companies in Ireland, thereby supporting additional employment and economic activity in the State.
I also provided in Budget 2024 for an increase in the Research and Development (R&D) tax credit from 25% to 30%. While this increase is relevant to businesses of all sizes, it will be of particular benefit to smaller companies outside the scope of the new Pillar Two rules introduced with effect from end-2023.
Further information on these incentives is available on the Revenue website at www.revenue.ie.
Finally, the increasing complexity of the tax system is a concern frequently raised by businesses, particularly smaller businesses with more constrained resources, and I have committed to making efforts to simplify the tax system where possible. As part of this initiative, I have committed to introducing a participation exemption for foreign sourced dividends in Finance Bill 2024. The detailed development work will continue over the coming months and it is intended that, when operational, the participation exemption will provide administrative and competitive benefits for businesses operating in Ireland.