Irish tax rules for start-ups undermine growth despite 12.5% CT rate

Attempts by Ireland to attract more start-up companies and encourage entrepreneurs are being hampered by ‘immensely restrictive’ capital gains tax (CGT) rules coupled with a ‘penal regime’ for offering share options, make it difficult for Ireland to compete with their UK equivalents, Mary Honohan, incoming president of the Irish Tax Institute is warning. Pat Sweet reports

Speaking at the institute’s AGM Honohan, who is a PwC tax partner, said tax measures to help entrepreneurs raise capital and share option measures to ensure they can hire new employees should be a priority in the 2016 Budget which is scheduled for 13 October.

By contrast the Irish government offers one of the most favourable tax environments for large business and multinationals in the EU with a corporation base tax rate of 12.5%, well below the UK equivalent, which has attracted major US multinationals including IT and technology giants like Apple, Amazon and HP to locate their European tax base in the Republic.

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