The standard rate of Capital Gains Tax is being reduced from 33% to 31%.
Minster for Finance Simon Harris said the changes were made in a bid to encourage entrepreneurship, reward risk and facilitate the scaling-up of home-grown Irish firms.
Mr Harris said that small business owners, risk-takers and entrepreneurs are the “bedrock of our economy”.
He also announced changes to the Enhanced Reporting Requirements, which were introduced in 2024 and oblige employers to make certain reports to Revenue.
From January, he said that employers will be able to choose to continue to operate in real time, or make monthly returns.
The minister told the Dáil that the Government wants to make it easier for businesses to invest, innovate and grow and will undertake a “holistic” assessment of the various grant schemes, enterprise tax incentives and business development programmes currently on offer.
To encourage private investors to invest in Irish businesses and to take a chance on Irish start-ups, Mr Harris said the Government is extending the Employment Investment Incentive; the Start Up Capital Incentive; the Start-Up Relief for Entrepreneurs; and the Relief for Investment in Innovative Enterprises, also known as Angel Investor Relief.
“As trade patterns shift, it is more important than ever that we create a dynamic and innovative start-up culture in Ireland and that we help them attract funding and scale-up,” he said.
He also said that the corporation tax small company start-up relief was being extended.
The Minister for Finance also announced a €1bn investment programme as part of the Ireland Strategic Investment Fund (ISIF).
He said this will further support the growth of Irish companies.
Mr Harris said this is the ISIF’s biggest ever investment in scaling and it will be a three-year programme running up to 2030.
“We want to create an environment in which Irish businesses remain rooted in Ireland but can scale-up and grow internationally,” he stated.
He added that in co-ordination with Enterprise Ireland, ISIF will invest through a range of channels to ensure that ambitious Irish businesses have enough capital to do just that.
Bank levy to be further extended
Mr Harris said that he will extend the bank levy for a further year, with a target yield of €200m.
He said that although the country’s recovery has been extraordinary, the scars of the financial crisis remain, particularly in housing and the construction sector.
The liable institutions will continue to be AIB, EBS, Bank of Ireland and PTSB.
As in 2026, the levy will be apportioned based on the level of eligible deposits held by each bank as at the end of 2024.
