Willie Penrose (Longford-Westmeath, Labour)
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34. To ask the Minister for Finance if he has considered the need for special tax incentives to allow small businesses to establish in areas outside of the main cities. [52144/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy will be aware that a range of measures have been introduced or extended in recent years to support small businesses, both small incorporated businesses and individuals established in sole trades or partnerships.

These include measures such as: the introduction of, and subsequent increases to, the Earned Income Credit; the Start Up Refunds for Entrepreneurs (SURE) scheme; the three-year start-up relief for small companies; and the certification scheme for small companies using the Knowledge Development Box.

Any potential tax incentives designed specifically to benefit small businesses establishing outside the main cities would require consideration of State aid implications. As the Deputy will be aware, State aid becomes a concern when making any change which would provide a benefit to any targeted cohort of taxpayers, for example based on their size, regional location or other factors.

However I would note that measures relevant to the farming sector are predominately relevant to businesses established outside the main cities, and the Deputy will be aware of the range of supports available to this sector.

It must also be considered whether a tax expenditure would be the appropriate policy tool through which to provide support for new small businesses. Tax reliefs or incentives are primarily relevant to profit-making businesses with potential tax liabilities, whereas new small businesses may often be loss-making in their early establishment phases. Direct expenditure supports such as grants, innovation vouchers and Enterprise Ireland funds are potentially more effective policy tools in this area.