Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

SMEs are the foundation of the economy, accounting for the majority of employment in the State. Their vital importance to our economy is reflected in our programme for Government commitments.

On tax measures, my Department has been proactive in supporting SMEs by introducing and expanding a number of taxation measures, which help small businesses access investment, scale-up and expand. Measures include: the section 486C relief for certain start-up companies; the employment investment incentive, EEI; the key employee engagement programme, KEEP; the start-up relief for entrepreneurs, SURE; and the start-up capital investment, SCI.

Broadly, the section 486C relief provides relief from corporation tax to new start-up companies that have a corporation tax liability of less than €40,000 for an accounting year. The purpose of the relief is to encourage start-up companies in Ireland, thereby creating additional employment and economic activity in the State. Promoting investment and jobs in Ireland is a key part of the Government’s overall strategy, as was recognised when the scheme was extended from three years to five years as part of the Finance Act 2021.

The 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. KEEP allows certain SMEs to engage key staff in a more cost efficient manner. The scheme is a focused share option programme, intended to help SMEs attract and retain talent in a highly competitive labour market.

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. I can respond further to the supplementary questions.

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