Brian Cowen has announced that the Business Expansion Scheme is being renewed from January 1, 2007 for a seven year period to the end of 2013.
The BES company limit is also being increased from its current level of €1m to €2m, subject to a maximum of €1.5m to be raised in a 12 month period. The investor limit is also being raised from its current level of €31,750 to €150,000.
The Minister said that in the case of the Seed Capital Scheme, the annual investor limit is being increased to €100,000 - pending approval from the European Commission.
He said he was enhancing the existing R&D tax credit for firms in an effort to promote research and development in the country's manufacturing companies. These improvements will cost €70m in a full year and complement Government spending on Science, Technology and Innovation.
The Minister also announced a range of measures aimed at reducing the administrative burden on the country's small businesses. These include start-up companies not having to pay preliminary tax in respect of their first accounting period and the annual VAT cash accounting threshold for small firms is to be raised from €635,000 to €1m from next March.
The small business VAT registration turnover thresholds will also be increased from €27,500 a year for services and €55,000 a year for goods to €35,000 and €70,000 respectively from March 1. Mr Cowen says this measure could take 8,000 businesses out of the VAT system and will considerably reduce their administrative burden.
The frequency of VAT payments for smaller firms is also to be reduced from six VAT returns a year to three each year in some cases and two a year in others. The transaction threshold which triggers the requirement for a tax clearance certificate is also being increased from the current €6,500 to €10,000.
The Minister also said he was introducing a VAT measure especially for conferences, which will allow deductibility of accommodation expenses on a ring-fenced basis. He said this was in recognition of the importance of tourism to the country's economy.
