Dáil Éireann Debate, Tuesday - 24 February 2026
395. Deputy Emer Currie asked the Tánaiste and Minister for Finance for an update on progress of recommendation no. 41 of the Action Plan for Competitiveness and Productivity on a review of tax measures to incentivise investment into start-up and scaling companies. [15124/26]
Amharc ar fhreagraThe Action Plan on Competitiveness and Productivity, a key commitment in the Programme for Government, was published in September 2025. The action plan contains 85 actions for enhancing our competitiveness and productivity performance, with 26 of these identified as priority actions.
Recommendation 41 of the Action Plan refers to reviewing tax measures to incentivise investment into start-up and scaling companies. It should be noted that all taxes are kept under review on an ongoing basis, as a normal part of the budgetary process.
The taxation measures which are available to 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 (“RER”) and the new relief for investments in innovative enterprises which target angel investors (“Angel Investor relief”).
These tax incentives have undergone significant change in recent years following feedback from stakeholders, including in particular the SME community.
EII provides income tax relief for individuals who make risk capital investments in qualifying SMEs. The EII relief has a sunset clause of 31 December 2026 and review of this relief is required before any decision to renew the relief can be made. The position is the same for Angel Investor relief. The EII and Angel Investor relief are schemes that operate under the EU State aid General Block Exemption Regulation (GBER). A revised GBER is expected by Q4 2026 and the review of these schemes will have to be cognisant of any potential changes to the EU regulation.
RER provides a reduced rate of Capital Gains Tax (CGT) to qualifying business assets. The lifetime limit of €1 million of gains on which relief can be claimed was increased to €1.5 million with effect from 1 January 2026. The increased lifetime limit should significantly assist entrepreneurs to scale and grow their businesses, or to begin new ventures, building on their previous entrepreneurial experience.
KEEP, is a is a tax efficient share option scheme and is designed to facilitate the use of share-based remuneration by unquoted SME companies to attract and retain key employees. Under KEEP, employees are given an option to acquire shares at a future date, at a fixed price. Employees who exercise KEEP options are exempt from a liability to IT, USC and PRSI on any gain arising. CGT is due on any gains arising from the subsequent disposal of shares acquired. As with other share-based remuneration schemes, shares awarded through KEEP are exempt from employer PRSI. Finance Bill 2025 extended the relief for a further three years to 31 December 2028. The estimated full year cost of the extension is €4 million. KEEP is a notified State Aid, any amendment or extension to KEEP requires European Commission approval.
The Department of Enterprise, Tourism and Employment is finalising a finance for scaling implementation strategy. This strategy will align with the commitments outlined in the programme for Government and supports the specific actions set out in the action plan on competitiveness and productivity.
As a general point, any decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances.
