Impact of Budget 2013 on the Technology Sector

RSM Farrell Grant Sparks welcomes Minister Noonan’s recognition today of the critical employment role played by the SME sector and his introduction of a “Ten Point Tax Reform Plan” to help boost the sector.

However, while many of the measures in the Plan are positive, more could have been done to boost the SME Sector generally and the technology sector in particular. Michael McGivern, Partner, Tax and Technology Partner with RSM Farrell Grant Sparks, commented;

“While the proposals contain some positive aspects, I was hoping for some bolder announcements from the Minister. The extension of the EII to 2020 is welcomed, but further improvements to it could be made such as widening the range of applicable sectors, and removing the tax relief for individual investors from the list of specified relief restrictions”.

In relation to the Foreign Earnings Deduction proposals, Michael commented that “the list of qualifying countries should be extended further and other changes could be made which would help the SME sector such as reducing the 60 days a year requirement which does not fit in with how many SMEs operate”.

Michael has welcomed the proposals to double R&D tax credit volume based threshold to €200,000 as “a further step in the right direction, which will particularly assist the SME sector”. Michael is also pleased to note that the R&D tax credit regime will be reviewed generally in 2013 and he hopes that this review will enhance the regime further.

Finally, Michael is pleased with the proposals to amend the Three Year Relief for Start Up companies to enable them carry forward the relief where necessary due to the existence of early stage losses.

Please note, we have a tax expert available for comment on the above topic. For further information, please contact:

Michael McGivern

Tax Partner, RSM Farrell Grant Sparks:

+353 (0) 1 418 2092

michael.mcgivern@rsmfgs.ie