THERE APPEARS TO BE a real misunderstanding in Ireland's Department of Finance about how to drive real entrepreneurship. I wish everyone with responsibility for setting private investment policy would set aside time to listen to the motivations of entrepreneurs. If that happened, perhaps in a takeaway restaurant like Hillbilly's (shown), I believe there would be more forward-thinking treatment of Capital Gains in Ireland.
Hillbilly's. Where I've met dozens of entrepreneurs.
The Finance Bill is currently making its rounds and it contains a requirement that beneficiaries of capital gains tax relief must be company directors. If a founder sells her company and the board wants her to step aside, she will get slammed with an inequitable demand for tax. If her co-founder is allowed to continue as a director, he gets to keep around 30% more (lower tax) in the business deal. In one fell swoop, Irish tax law works to reduce the incentive to expand a business by stifling the incentive to sell.
Colm Lyon's submissions to the Department of Finance appear to have gone unheard, causing many in Ireland's startup communities to believe a disconnect exists between public policy makers and entrepreneurs. The current capital gains structure is punitive, signalling to high potential startup founders I know that they need to set up their new businesses in England or the States.
I wish the civil servants in the Department of Finance had a requirement to attend events like Limerick's Startup Weekend because they would meet entrepreneurs at the coal face who--unlike politicians or government workers--can't charge the public purse for subsistence or mileage claims while scraping together their startup vision.
[Disclosure: Bernie Goldbach worked in three start-up ventures in Ireland and paid Revenue before closing down each time.]
