IDA Ireland lobbied the Minister for Finance Michael Noonan to introduce a tax break for people who rent out their properties over the Airbnb website.
The request was part of a Pre-Budget submission made by the IDA last year in which it advocated for tax exemptions for the "Sharing Economy".
In its submission - released to RTÉ News under Freedom of Information - the State body proposed the introduction of a €5,000 tax exemption for those who earn from the sector.
It also proposed a special tax rate of 10% in an effort to demonstrate Ireland was "friendly" to the sharing economy.
The IDA said the sector also included car sharing company Uber, music streaming and firms which provide non-bank finance.
It said the "Sharing economy" had the potential to disrupt existing businesses such as hotels and taxis.
In 2015 the Revenue Commissioners determined that people who rent out properties on Airbnb were liable to pay income tax on their earnings.
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Some had used the rent-a-room tax break which allowed them let a room in their home without paying tax up to a certain threshold.
Airbnb hosts are treated like all other landlords and must file a tax an annual tax return.
The company is also obliged to disclose full details earnings by Irish hosts to the Revenue Commissioners.
However the IDA said this brought Airbnb hosts into the self-employed tax category and resulted in a high administrative burden for a potentially low level of exchequer benefit.
The IDA said given that the "Sharing Economy" is happening anyway the "tax system will have to adapt to it".
"It would be efficient to do so in an administratively friendly mechanism that may encourage the development of an entrepreneurship culture," it added.
Despite the IDA submission the Government did not include any concession for the sharing economy in the Budget.
The pre-Budget submission, which was dated June 2016, also calls for intervention to ensure housing to meet demand.
It suggested that the height restrictions in central business districts be reviewed in light of international norms, greater population density and in an effort to reduce congestion.
It is also called for the road infrastructure to be upgraded and the extending of tax relief for investment in films to the gaming and digital entertainment industry.