Ireland’s Budget 2027: Does It Wear the Green Jersey?
Partly. A €1bn scaling programme is a real start on building larger Irish-owned companies. But the founder-side reforms that would keep owners scaling rather than selling were left untouched again – and none of them is hard, complex or expensive.
three years to 2030
CGT cut to 31%
collected in 2024
say they need
Ireland’s Budget 2027 was delivered by the Government on 6 October 2026. This article reads its enterprise measures against one test: Does each one help Irish-owned companies grow to mid-size and stay Irish? It sets out what the Budget did, what it left untouched, and the decisions that remain open for Finance (No. 2) Bill 2026, the Bill that will put the Budget into law.
Every Budget figure is taken from the Government’s own published documents – the Ministers’ Budget statements, the Budget 2027 Tax Policy Changes document and the Tax Strategy Group papers. Where a point is Talav Advisory’s view or experience rather than published data, it is labelled as such. Measures are as announced and remain subject to the Finance Bill.
One economy, one community
Enterprise policy does not stop at tax and grants. Companies live in their communities, and they can only grow if their staff can live well near where they work. A fair society and the growth of Irish-owned business do not compete – each depends on the other.
| Community need | Why it matters to a growing company | Budget 2027 |
|---|---|---|
| Housing | Staff must find a home within reach of the job | €9.4bn for housing in 2027, including over €1bn for starter homes |
| Transport | Decides how far a company can draw its staff from | More for DART+, BusConnects and Cork commuter rail; an extra €6bn for MetroLink, 2027 to 2030 |
| Water and energy | Needed for new facilities and to control costs | €2.3bn for Uisce Éireann; €1.3bn for climate, energy and environment |
| Childcare | Lets parents stay in work | Maximum monthly fees cut from €735 to €550 |
Source: Statement by Minister Chambers on Budget 2027, 6 October 2026.
What the Budget did for business
The Budget’s enterprise tax measures carry a published cost. The largest by far is the cut in the standard rate of Capital Gains Tax.
| Measure | What changed | Full-year cost |
|---|---|---|
| Capital Gains Tax | Standard rate cut from 33% to 31% for disposals from 7 October 2026 | €186m |
| R&D tax credit | First-year payment raised from €87,500 to €105,000; outsourcing limits raised to 20% or €200,000; 5% uplift on R&D wage costs | €118.3m |
| Investor reliefs | Employment Investment Incentive (EII), Start-Up Capital Incentive and Start-Up Relief for Entrepreneurs extended in current form, subject to new EU state aid rules | €58m |
| Start-up company relief | Corporation tax relief for a new company’s first five years extended to companies starting up to 31 December 2030 | €11m |
| Angel Investor Relief | Extended in current form, subject to new EU state aid rules | €8m |
| Knowledge Development Box | Lower tax rate on profits from Irish-developed patents and software, extended to 1 January 2032 | – |
| Employer PRSI | Weekly threshold raised from €552 to €600 for 2027 – a saving of €650 to €700 per employee below the threshold | – |
| Enhanced Reporting Requirements | Employers may report tax-free staff payments by the 14th of the following month instead of in real time, from 1 January 2027 | – |
| Investment Account | New savings account from 1 July 2027: Up to €12,000 a year, flat 1% tax on value above €50,000 | – |
Source: Department of Finance, Budget 2027 Tax Policy Changes, Table 1 and sections 4, 6 and 8; Statement by Minister Harris on Budget 2027 (PRSI). A dash means no separate cost is shown for the measure in Table 1. All costs are gross: They take no account of the benefits that follow – more activity and sales, and the VAT, income tax and CGT that come with a greater volume of business and transactions.
Set against those costs, the close company surcharge – one of the main reforms left untouched – is a small sum. Revenue collected €90.5m from the two surcharges in 2024. We are not asking for the surcharge to be removed, but for its rules and Revenue’s guidance to be reformed, so that companies keeping reserves to grow are no longer caught. That would reduce the amount collected by a portion only – before counting the activity and tax receipts that retained investment would generate.
Sources: Department of Finance, Budget 2027 Tax Policy Changes, Table 1 (full-year costs); Revenue, “Corporation Tax – 2025 Payments and 2024 Returns”, Table 30 (close company surcharge €58.2m and service company surcharge €32.3m collected in 2024). The surcharge figure is money collected, not a Department costing; the reform proposed here would reduce it by a portion only. All costs are gross and take no account of the extra activity, sales and tax receipts the measures would generate.
What helps
The ISIF €1bn scaling programme – the headline
The Minister described the Ireland Strategic Investment Fund (ISIF) programme as ISIF’s biggest ever investment in scaling: A three-year programme running to 2030, investing through a range of channels in co-ordination with Enterprise Ireland. The Department of Enterprise, Tourism and Employment says it will provide equity and debt, including a €100m allocation for venture capital. It goes straight at Ireland’s missing middle – too few Irish-owned companies grow to mid-size.
No programme detail has been published. The Department of Enterprise’s own study of scaling finance shows where the demand sits:
Four tests will decide the programme’s value:
- Size: It should cover the €3m to €10m-plus range the study identifies, and keep capacity for braver investments of €10m to €50m to drive major scaling.
- Channels: Direct, through funds, or alongside Irish private equity and family investors.
- Reach: Profitable, established companies outside venture-backed technology, not only start-ups.
- Regions: Companies outside Dublin.
Enterprise Ireland’s own targets need to line up with the programme. Building a scaled Irish company may not add many jobs at first; value, exports and Irish ownership may be the better measures of success.
Capital Gains Tax, R&D and the Investment Account
- CGT cut to 31%: Welcome, and a first step. But it pays at the point of sale. The harder problem is reducing the founder’s personal risk while the company is still growing, so they keep building rather than sell.
- R&D tax credit: Faster first-year cash, more room to work with universities and a wage-cost uplift help smaller research companies most – continued movement in the right direction. The next step is simpler claims, so the credit reaches small companies without specialist advisers.
- Investment Account: A welcome step. It should let savers put a modest share of their savings into unquoted qualifying Irish companies, channelling household savings to companies trying to scale. The published detail lists shares, bonds, funds and insurance products without saying whether unquoted shares qualify; the Finance Bill should settle it.
- Start-up relief and PRSI: Both lower the cost of starting and hiring. Jobs in young companies pay back to the State.
Opportunities missed
Entrepreneur Relief – untouched
The relief still rewards the sale. Founders need support while they are still building – reducing personal risk mid-growth, so personal circumstances or company risk do not force an early exit.
Close company surcharge – untouched
A close company is one controlled by five or fewer people, or by its director-owners – which covers most Irish-owned firms. The surcharge is an extra tax on income such a company keeps rather than pays out. It does damage in two ways:
| Problem | Effect |
|---|---|
| Too wide | Aimed at genuine professional practices, its reach through Revenue’s list of professional services catches many businesses that are nothing of the kind |
| Penalises reserves | It taxes the retained income Irish companies rely on to grow – to buy equipment, hire a team, invest in facilities, make an acquisition or provide matching funds |
Irish-owned companies have no multinational parent to supply cash, and less access to large-scale debt. The ask is reform, not removal: A change to the tax Acts and to Revenue’s Tax and Duty Manual, so the surcharge keeps its anti-avoidance purpose without catching reserves kept for growth. No new scheme is needed. The full case is in What the Close Company Surcharge Really Costs Indigenous Scaling.
Investor and share schemes – extended, not simplified
The Employment Investment Incentive is to be extended in its current form. KEEP, the Key Employee Engagement Programme for share options in smaller companies, is not mentioned. Both are complex enough to put off the companies and investors they are meant for. Where there is fraud or misuse, hold directors to account – do not design the schemes on the assumption of bad actors everywhere.
Employee ownership trusts – not mentioned
An employee ownership trust (EOT) lets an owner sell the company to a trust that holds it for all staff, paid for from future profits, so staff need no capital of their own. Ireland has no EOT regime. The Department of Finance’s Tax Strategy Group paper TSG26-01 (Income Tax, June 2026) discusses EOTs but makes no recommendation, pointing to UK relief costs that grew far beyond forecast. EOTs would give a real succession route to many small companies, including Local Enterprise Office clients, where the owner wants to retire and no family or outside buyer is in view.
Enhanced Reporting Requirements – a minor improvement
Monthly reporting is now an option instead of real time. Real-time reporting was never proportionate – it starts from the assumption that every employer is at fault. Reporting every two months, in line with the VAT return cycle most small companies already work to, would give one bookkeeping deadline, not two. If the real concern is personal expenses and benefits in kind, the annual audit is the place to check them.
Beyond the Budget
The handover from Enterprise Ireland to IDA Ireland
When an Irish company is bought by an overseas owner, it leaves Enterprise Ireland’s client base. A handover process exists, but in Talav Advisory’s experience through GeoScience Ireland it is not effective: IDA Ireland’s focus is on attracting new overseas investment, not on growing companies that were Irish-owned. Many of these companies still have real room to grow and hire here, whoever owns them. IDA targets should count growth in acquired Irish companies, not only new inward investment.
EU fragmentation and growth by acquisition
At the Guinness Enterprise Centre’s Startup to Scale Conference on 7 October, Declan Hughes, Secretary General of the Department of Enterprise, Tourism and Employment, said firms still face 27 regulatory systems rather than one market. Ireland is using its EU Presidency to push for “EU Inc”, a single company registration that works across the EU. He warned that companies forced abroad to scale risk ceasing to be Irish in any real sense.
As we see it, the Irish market is small. For many companies with the reserves to do it, the fastest route to scale is to buy companies in other EU countries. Different company, employment and tax rules in each country make that costly – another reason internal reserves matter, and another reason the close company surcharge is the wrong tax.
What we ask for
A multi-year vision for managing the economy, with set actions in key areas, is a basic requirement – and a plan for indigenous business is part of it, not an annual add-on. Each Budget adjusts thresholds and adds conditions; simpler rules and fewer, clearer supports would do more. The issues and options are clearly set out, and most are neither complex nor expensive. Make the decisions and implement them.
Six tax fixes
Reform Entrepreneur Relief to reward founders who keep building, not only those who sell. Narrow the close company surcharge to genuine professional practices and stop it penalising reserves kept for growth. Let Investment Account savers put a modest share into unquoted qualifying Irish companies. Simplify EII and KEEP, dealing with misuse by holding directors to account. Complete the EOT analysis in TSG26-01, then introduce a regime with capped reliefs. Move Enhanced Reporting Requirements to every two months, in line with VAT returns.
Publish and target the €1bn
Publish investment sizes, channels, eligibility and regional reach. Cover the €3m to €10m-plus demand the Department’s study found, with capacity for €10m to €50m investments. Make sure it reaches established, profitable companies, not only venture-backed technology.
Align the agencies
Align Enterprise Ireland’s targets with building scaled Irish companies, not only job numbers. Make the existing handover to IDA Ireland work in practice, with IDA targets that count growth in acquired Irish companies.
Deliver EU Inc
Common EU rules that make cross-border acquisition and group management simpler, pressed with the European Commission, Council and Parliament.
Conclusion
Ireland’s Budget 2027 wears the green jersey in part. The ISIF programme, the R&D changes and the new Investment Account point in the right direction, and the infrastructure spending supports the communities companies depend on. But the founder-side measures – Entrepreneur Relief, the close company surcharge, employee ownership trusts and simpler share schemes – were left untouched, though none would cost more than the CGT cut that was made – and each would bring back some of its cost in extra activity and tax. Finance (No. 2) Bill 2026 is the next chance to act. Stop talking the talk – start delivering.
Sources and methodology
- Budget measures and costs
- Department of Finance, Budget 2027 Tax Policy Changes, Table 1 and sections 2.3, 4, 6, 8 and 9. Statement by Minister Harris on Budget 2027 (ISIF programme, employer PRSI). Statement by Minister Chambers on Budget 2027 (housing, transport, water, energy, childcare).
- ISIF programme and scaling finance demand
- Department of Enterprise, Tourism and Employment, Budget 2027 news, 7 October 2026, and Market demand for and supply of scaling finance in Ireland, page iv.
- Employee ownership trusts
- Department of Finance, Budget 2027 Tax Strategy Group papers, TSG26-01 Income Tax, paragraphs 133–140.
- Close company surcharge
- Revenue, “Corporation Tax – 2025 Payments and 2024 Returns” (published 7 May 2026), Table 30, as set out in What the Close Company Surcharge Really Costs Indigenous Scaling.
- Entrepreneur Relief and start-up relief
- Revenue, Revised Entrepreneur Relief and Tax relief for new start-up companies.
- EU fragmentation
- Business Eye, report of the GEC Startup to Scale Conference, 7 October 2026.
- Talav Advisory experience and view
- The Enterprise Ireland to IDA Ireland handover point reflects Talav Advisory’s experience through GeoScience Ireland. The assessments of each measure, and the asks, are Talav Advisory’s view.
