David Cullinane (Waterford, Sinn Fein)
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601. To ask the Minister for Jobs, Enterprise and Innovation the definition of entrepreneur that is used by her Department when framing legislation and in particular tax relief schemes; and if she will make a statement on the matter. [28271/16]

Mary Mitchell O'Connor (Dún Laoghaire, Fine Gael)
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The goal of this Government is to support the creation of an additional 200,000 jobs by 2020 with 135,000 outside Dublin and to achieve sustainable full employment. This is a whole of Government effort and is delivered through our integrated Action Plan for Jobs. The Action Plan for Jobs process aims to strengthen the enterprise base, in particular through supporting entrepreneurship, start-ups and small and medium sized enterprises.

The terms ‘entrepreneur’ and 'entrepreneurship' can encompass a wide array of activities and individuals. The National Policy Statement on Entrepreneurship identified entrepreneurship with establishing a new firm or venture. Richard Cantillon, an Irish economist of French descent in the early 18th Century is credited with introducing the term 'entrepreneur' as what most people understand as meaning someone who organizes land, labour or capital to produce or supply goods and services and assumes the risk of a business in return for the profits. This definition emphasises the role of the entrepreneur in taking on risk.

In turn, entrepreneurs can be either ‘replicating entrepreneurs’, who establish and organise a business firm to mimic the function and processes of firms already in existence, or ‘innovating entrepreneurs’, who introduce a change or innovation, whether through the invention of a new good or service, introduction of a new method of production, creation of a new market, discovery of a new source of supply, or re-organization of an industry in such a manner as to improve efficiency.

The definition of the entrepreneur as an individual establishing a new firm or enterprise captures the role of the entrepreneur in establishing a new business. The Global Entrepreneurship Monitor (GEM) collects cross-country data on individuals establishing new ventures. The Central Statistics Office (CSO), as part of their Structural Business Statistics, collects data on the legal form of new enterprises, which determines whether a new enterprise is liable for income tax (as an individual proprietor) or to corporation tax (as an incorporated firm).

Self-employment and SME owners are often used as proxies for entrepreneurship, and have the merit of inclusivity and capturing the risk-taking element of entrepreneurship. These are also measurable through surveys carried out by the CSO. In addition, income from self-employment is often subject to different deductions for tax purposes and provision is available for capital allowances in recognition that income from self-employment derives from a trade or profession, while social insurance systems treat self-employed persons differently in terms of contributions and benefits.

The Department of Finance frame legislation in relation to all tax matters. There are a range of tax expenditures provided to entrepreneurs and small and medium-sized enterprises through the tax system. Specifically, for the purpose of availing of the revised CGT Entrepreneur Relief introduced in Budget 2016 and given effect in Finance Act 2015, and which offers a 20% rate of CGT (rather than the standard 33% rate) on qualifying assets disposed of by a qualifying individual, up to a lifetime limit of €1 million in qualifying gains, the following conditions apply:

- A qualifying individual is someone who holds 5% or more of the shares in the company (or is a sole trader or owns the company outright) and has worked as a director or employee of the company for three out of the previous five years

- Qualifying assets are shares in or assets of any company other than those involved in certain excluded activities, including dealing in shares, securities, commodities, land or property.