Three-year Tax Exemption for Start-up Companies

As announced last year, this measure was reviewed prior to the Budget and this relief is being extended for companies commencing to trade before the end of 2018.

Film Relief

The cap on eligible film expenditure is being increased from €50 million to €70 million. This measure is subject to state aid approval.

Knowledge Development Box

In recognition of the importance of encouraging innovation to our economic policy, a knowledge development box regime will be provided for in the upcoming Finance Bill. The measure was first signalled in Budget 2015.

This tax incentive will ensure that profits arising from certain types of intellectual property will qualify for a reduced rate of corporation tax of 6.25%. It will further enhance the attractiveness of our corporation tax system to innovative industries and will complement the existing reliefs in place such as the R&D tax credit and the intangible asset regime.

As this will be the first OECD-compliant “patent box” system in the world it offers Ireland a competitive advantage over other countries in providing long-term certainty to companies planning their R&D activities.

Tax compliance measures

The Revenue Commissioners are to receive €75 million to fund increased audit and investigations activities.

International tax

In tandem with the Budget, the Government released a report on our International Tax Strategy. This report outlines our approach to the implementation of the OECD Base Erosion and Profit Shifting actions and how we will engage with the emerging EU tax agenda.

It explains the challenging steps already taken by Ireland in changing its tax residence rules to eliminate the “Double-Irish” and similar structures whilst stating our commitment to retaining a corporation tax system that will allow us to attract foreign direct investment. It also emphasises our willingness to cooperate with other developed countries in tackling aggressive tax avoidance by multinationals and identifies the opportunities that the new international tax landscape presents to us.

Furthermore, to enhance transparency, the Finance Bill will provide for the introduction of country-by-country reporting of information, in line with the OECD recommendations.