Dáil Éireann Debate, Tuesday - 29 September 2026
181. Deputy Barry Heneghan asked the Tánaiste and Minister for Finance the tax measures being considered for Budget 2027 to support SMEs facing increased costs and to encourage small businesses to invest, grow and create employment; and whether changes to existing tax reliefs for SMEs are being examined as part of the Budget process. [68535/26]
View answerA number of tax incentives are in place which are intended to encourage investment in indigenous businesses, particularly in SMEs. These measures include the Employment Investment Incentive (EII), the Start-Up Capital Investment (SCI) and the relief for investment in innovative enterprises, also known as Angel Investor Relief. In addition to these reliefs the R&D Tax Credit makes a significant contribution to Ireland's SMEs, helping them expand and innovate thereby improving competitiveness.
The Employment Investment Incentive (EII) provides a platform for investment in certain SMEs. It 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 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.
Angel Investor Relief is a targeted CGT relief for angel investors in innovative start-up SMEs. This relief aims to assist SMEs in attracting investment and make Ireland a more attractive location for angel investment. It does so by allowing angel investors to benefit from a reduced rate of CGT (between 16 percent and 18 percent) on a gain of value up to twice the value of the investor’s initial investment, subject to a €10 million cap.
EII, SURE, SCI and the Angel Investor Relief are State aid and operate under the General Block Exemption Regulation (GBER), which allows certain categories of State aid to be granted without prior notification by Member States to the European Commission. The Commission is currently undertaking a revision of the GBER, and a final revised version is expected in Q4 2026 after which time further potential amendments will be examined in the context of Budget 2028.
Under the CGT Revised Entrepreneur Relief, eligible individuals can avail of a reduced CGT rate of 10 percent on the disposal of qualifying business assets, up to a lifetime limit of €1 million (increasing to €1.5 million from 1 January 2026). This relief is broadly based and is aimed at company founders/key employees who must satisfy working time requirements in order to be eligible.
As a general point, the Government is conscious of the challenges facing all businesses in the current economic climate. The Final Report of the Cost of Business Advisory Forum was published recently, and this report contains 63 recommendations aimed at reducing business costs, strengthening competitiveness and easing regulatory burdens. The Government will give careful consideration to its recommendations and will issue a formal response in due course.
As the Deputy will be aware, decisions on any potential amendments to current reliefs or the potential introduction of new tax reliefs are generally made in the context of the annual Budget and Finance Bill process and at the appropriate time, and details are provided accordingly.
