Mr. John Flynn:

If one looks at a very high level, the competition in early stage companies is about the resources and skills we can attract into the companies. We are dealing with a fairly mobile workforce, so it breaks down into the two key categories of income tax and capital gains tax. If one takes the two major economies which would be leaders and competitors of ours - the US and the UK - in both income tax and capital gains tax, we would be inferior.

The two major economies that compete with us are the United States and the United Kingdom. Our income tax and capital gains tax rates are less attractive than theirs.

Our 52% rate of income tax compares with 47% in the UK and 40% in the US. Attracting talent into companies becomes an issue in respect of livelihood. If we take a cut in salary, our net take home pay is lower but we can compensate for that with additional options in companies to help employees and founders own a piece of the company.

Capital gains tax in Ireland is 33%, but in the UK there is tapered relief for entrepreneurs at 10%. Our rate is a major disincentive when we compete against employees in the UK and against people who want to invest in companies where there is less dilution of their ownership because employees can make more out of smaller stakes in their companies. In the US, capital gains tax is approximately 23%. Many of the share option schemes are subjected to income tax in Ireland. We are lobbying to tackle those two tax features to attract the best people into the start-ups which is the key component of building a successful enterprise.