Mr. Vincent Harrison:

We made a number of specific proposals on growing Irish businesses. While we highlighted competitiveness between Ireland and the United Kingdom, our focus is not solely on Brexit. It is appropriate that Irish businesses are being encouraged to open establishments in the UK to prepare themselves for the period after Brexit and we are also inviting UK businesses to open establishments in Ireland. This is where competitiveness and some of the differences in tax treatment move from the theoretical to the wholly practical. To develop a business of scale in Ireland, it is necessary to move outside the Irish market. The UK is typically the first location to which companies move to grow their business and markets.

On the tax system, we propose an increase in entrepreneur relief. The current structure of the relief incentivises cashing out of a business early in the cycle. Our proposal to increase the lifetime cap to €15 million would encourage Irish investors to maintain their base in Ireland and grow their business. We also propose allowing income tax relief on dividends to entrepreneurs, perhaps within the same cap. This would focus the relief on the entrepreneur retaining an involvement in the business, rather than having all of the tax incentive generated at the time of the disposal of the business.

Our proposals address the stage at which businesses might be considered for sale and the practical issues of establishment in the UK. They are driven by the objective of enhancing the ability of small-scale indigenous businesses to become large-scale companies. As noted, we are making these proposals against the backdrop of an over-reliance on multinational investment and with a desire to build up this sector in Ireland.