8th October 2025
- Significant Pro-Enterprise Tax Measures totalling €1 billion benefit to business in a full year
- €1.3 billion in Enterprise and Tourism Development
- €4.88 billion Capital Commitment to 2030
- €800 million Capital Spend in 2026
Minister for Enterprise, Tourism and Employment, Peter Burke, has welcomed Budget 2026 as a future-proofed investment in Ireland’s enterprise base, designed to support job creation, regional development, innovation, tourism and long-term competitiveness in the Irish economy.
"Where businesses thrive, jobs follow. Budget 2026 is a pro-enterprise budget that recognises the critical link between industrial development, infrastructure investment and job creation. In today’s volatile global economy, we are focusing on supporting indigenous enterprise, regional development and tourism to ensure Ireland remains resilient and competitive. We must protect the 2.81 million jobs in our economy, which we cannot take for granted and which are essential to maintain quality of life for our people.
“A competitive economy requires a pro-enterprise tax policy. I am pleased to introduce several targeted measures, including reductions in VAT for hospitality which is particularly important for small and family-run businesses who operate on very low profit margins, increases in R&D tax credits, a significant benefit which will underscore Ireland’s commitment to FDI, enhanced entrepreneur relief, designed to support growth, innovation and job creation. I am also confirming the increase of 65 cent per hour in the National Minimum Wage, implementing the unanimous recommendation of the Low Pay Commission and ensuring our lowest paid workers will see a boost in their wages. This reinforces our commitment as a government to find a balance between a fair and sustainable rate for low paid workers, and one that will not have significant negative consequences for employers and competitiveness.”
These measures include:
- Hospitality VAT rate reduction for Food, Catering and Hairdressers, from 13.5% to 9%, effective 1 July 2026.
- R&D Tax Credit increase from 30% to 35%.
- Capital Gains Tax revised, Entrepreneur Relief lifetime limit threshold on qualifying gains increased from €1 million to €1.5 million, at a rate of 10%, one of the most substantial changes to this relief since its introduction in 2016.
- €0.65 per hour increase in the National Minimum Wage, effective 1 January 2026. This represents a 4.8% increase and will directly affect over 201,000 workers earning the National Minimum Wage.
- Extension of SARP (Special Assignee Relief Programme), which provides an income tax relief for persons assigned to work in Ireland from abroad and changes to the administrative requirements to make SARP more practical for businesses.
- Extension of KEEP (Key Employee Engagement Programme), a tax-efficient share option scheme, until 2028.
- Changes to the participation exemption for foreign dividends to introduce a simplified method of double tax relief.
- Enhancements to the Digital Games Tax Credit. This is a relief for the digital gaming sector that can be claimed on costs incurred in development.
- Relief on Foreign Earnings extended to the end of 2030 and the limit on the deduction increased to €50,000. This will assist indigenous companies that export and have employees located in emerging overseas markets.
“Budget 2026 is firmly focused on enabling Irish businesses to thrive,” said Minister Burke. “This budget delivers for the regions. Through enhanced funding for our Tourism Bodies, Local Enterprise Offices and targeted supports, we are empowering communities across Ireland to grow their local economies and build sustainable futures. The establishment of the AI Office of Ireland will be a landmark step in positioning Ireland as a leader in responsible AI adoption and in our ambition to harness digital innovation for productivity, competitiveness and growth.”
With an allocation of €1.3 billion, including €618 million in current funding and €680 million in capital funding under the National Development Plan (NDP), this budget reflects a clear commitment to building a resilient and dynamic economy.
Over the lifetime of the revised NDP (2026–2030), Minister Burke will oversee a €4.88 billion spend (which includes €1.2 billion of projected income earned by the Enterprise Agencies), enabling sustained investment in strategic enterprise programmes. Total capital investment into the enterprise sector in 2026 will be €800 million.
“Confirmation of the €3.68 billion capital spend under the revised NDP, combined with the expected €1.2 billion income earned by the Enterprise Agencies, will enable not only the continuation of existing capital programmes but also the delivery of multiannual strategic investments, targeting key priorities identified in the Programme for Government and my Department’s Action Plans on Market Diversification and Competitiveness,” said Minister Burke.
These additional priorities include:
- Next Generation Sites; €100 million to prepare large-scale regional serviced locations for future FDI.
- Scaling, Start Up Ireland and Regional Funding; €120 million to support high-potential Irish companies and businesses right across Ireland.
- Technology Centres; an additional €50m million to scale centres and drive innovation and commercialisation, partnering industry with academia.
- Tourism; €70 million to develop our Irish tourism SMEs and attractions, and link overseas investment with new airline routes.
- Important Projects of Common European Interest (IPCEIs); €120 million to position Ireland at the forefront of strategic European industrial initiatives, including advanced semiconductor and AI technologies.
- Space: €40m to enable Irish businesses to secure contracts that in turn will contribute to meeting the ambitions of the National Space Strategy for Enterprise.
Further capital allocations will be confirmed later in the year with additional funding expected from the Shared Island, Just Transition and European Regional Development Funds.
Budget 2026 will also continue to fund Departmental core capital programmes while unlocking new strategic investments that will shape Ireland’s enterprise future. These include:
- Supporting Enterprise Ireland to boost seed and venture capital funding, support decarbonisation through environmental aid and support green innovation.
- Enabling IDA Ireland to deliver regional property solutions and invest in innovation and decarbonisation.
- Supporting Local Enterprise Offices to help small businesses grow through digital and climate-readiness initiatives.
- Driving innovation through the Disruptive Technologies Innovation Fund.
Minister of State for Employment, Small Business and Retail, Alan Dillon, said,
“Supporting small business and sustainable jobs remains at the heart of this Government’s commitment to a strong economy. Budget 2026 strengthens regional development through enhanced funding for Local Enterprise Offices, targeted enterprise supports, and strategic investment in innovation and scaling. These measures will empower businesses to grow, adapt, and create sustainable jobs across Ireland.”
Minister Burke has also ensured that the Department will deliver a series of reforms to ensure programmes remain fit for purpose and achieve maximum value, such as;
- Continuing to reduce the burden on business through the Cost of Business Advisory Forum and the new Small Business Unit.
- Improving access to supports via the National Enterprise Hub, the establishment of Start-Up Ireland and a review of agency programmes to ensure they are easy to access.
- Driving digital transformation and promoting the productive use of AI across the enterprise ecosystem.
- Reprioritising capital programmes to focus on strategic goals such as competitiveness and productivity and market diversification.
A €25.5 million increase in current funding, bringing the Department’s allocation to €618 million, will ensure the delivering of several new and emerging priorities, including:
- Establishing the AI Office of Ireland to drive Artificial intelligence adoption and proportionate regulation.
- Enhancing tourism marketing and development, with increased support for Fáilte Ireland and Tourism Ireland.
- Supporting Enterprise Ireland and IDA Ireland to scale Irish businesses and attract global investment.
- Expanding the Department’s capacity to deliver on strategic initiatives in the areas of competitiveness and productivity, market diversification, digitalisation and sustainability.
- Strengthening operational supports for agencies such as the Local Enterprise Offices, InterTrade Ireland, and the National Standards Authority of Ireland.
In addition to this, €4.7 million will be allocated to the Department as part of the Revised Estimates Volume to support the delivery of an impactful and strategic Irish Presidency of the European Council in the second half of 2026.
Minister of State for Trade Promotion, Artificial Intelligence and Digital Transformation, Niamh Smyth, said,
“Budget 2026 marks a pivotal moment in Ireland’s digital transformation journey. We will continue to provide support to businesses via scaling, Start Up Ireland and Regional Funding. Local Enterprise Offices will also provide invaluable assistance to help SMEs to grow through digital and climate-readiness initiatives. With dedicated funding for the establishment of the AI Office of Ireland, we are laying the groundwork for a smarter, more innovative economy that empowers businesses and enhances public service delivery.”
Minister Burke went on to say,
“Budget 2026 is more than a financial plan, it’s a strategic commitment to Ireland’s enterprise base. With targeted investment, significant reforms and a clear focus on innovation and regional development, my Department is laying the foundations for a stronger, smarter, and more resilient economy, ready to face the challenges of tomorrow.”
ENDS
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