Tuesday 26 September 2017

State to scrutinise tax rate impact on business

'The tender will analyse the impact of the differences between Irish and UK tax offerings on company founders, employees and investors.' (Stock photo)
'The tender will analyse the impact of the differences between Irish and UK tax offerings on company founders, employees and investors.' (Stock photo)
Dearbhail McDonald

Dearbhail McDonald

The Government has issued a tender to assess the tax environment for scaling SMEs and startups amid fears Ireland's punitive personal tax rates are a significant obstacle to growing a business - and deterring senior executive talent and companies from relocating to Ireland.

The Department of Jobs and Enterprise tender calls for a review of the Irish tax code as the country faces the challenge of Brexit and international developments including potential US tax reform. The tender will analyse the impact of the differences between Irish and UK tax offerings on company founders, employees and investors.

It will also assess "any implications of recent key initiatives in the UK on Ireland's relative attractiveness for scaling SMEs and/or new entrepreneurial".

The assessment comes as the Revenue Commissioners reviews whether Ireland's tax burden - which bumps any single person earning more than just €32,800 a year into the high 40pc tax band - is stunting job creation.

In the UK, a single person does not enter its 40pc tax band until they earn more than £43,001 (€50,624) a year. In Germany, a 42pc personal tax rate for a single person doesn't kick in until they are earning more than €54,058 a year.

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