If you have a business idea, there has never been a better time to set up a new business

To incentivise entrepreneurs to set up their own business, the 2009 budget introduced a three year tax holiday from Corporation Tax and Capital Gains Tax for Limited Companies set up after 14th October 2008 where trading commenced on or after the 1st of January 2009. The exemption means that a qualifying company can earn up to €320,000 in taxable profits in each of the three years without paying Corporation Tax.

Needless to say, there are some activities which do not qualify for the relief:-

• Capital gains tax which arises on the disposal of development land.
• An activity previously carried on by another person in the State.
• Companies who are carrying on an excepted trade (i.e. land dealing and petroleum & mineral activities)

If there is a chargeable gain of between €40,000 and €60,000 than the company will be entitled to marginal relief.

This will be of interest to Entrepreneurs who need cash in the early stages of business development and is a welcome development given the difficulties in procuring finance in the present environment