Competitive tax policies are critical to support a sustainable entrepreneurial ecosystem. Kevin McLoughlin, Head of Tax and EY Entrepreneur Of The Year, Ireland outlines areas that could be improved by the Irish Government.
It is important to understand that improvements in fiscal policy are not just to provide a tax advantage to those who take entrepreneurial risk, but more to free up capital for reinvestment in new business ventures, which should facilitate job creation and in turn a greater return for the Exchequer, he says.
Capital gains tax
Following a number of capital gains tax (CGT) rate increases in recent years, Ireland’s CGT rate has increased to a relatively high rate in international terms of 33pc, which increases the challenge for Ireland’s competitiveness.
Universal social charge (USC)
Changes to the USC were announced in Budget 2015; however, the selfemployed were hit the hardest, paying a 3pc USC surcharge on earnings over €100,000. Lowering this rate would remove an entrepreneurial barrier.
Special Assignee Relief Programme
This is an important tax relief for our entrepreneurial ecosystem as it’s designed to boost the relocation of key talent to Ireland. We would like
to see the relief extended to include the USC
R&D tax credit regime
The continuous enhancements to Ireland’s R&D tax credit regime over the last number of years have been very welcomed, in particular last year’s removal of the base year. That said, more needs to be done, especially as our international counterparts are significantly enhancing their R&D schemes.