Significant new tax relief to encourage business investment in key areas will be announced as part of today's Finance Bill.

The Government will present the measures as a means to encourage funding for research and development spending and to attract high-level jobs in corporate headquarters' operations.

Part of the package will involve exemptions from capital gains tax for businesses that decide to sell subsidiary companies. This measure is designed to encourage the establishment of corporate holding companies here.

These companies typically hold a number of subsidiaries on behalf of their parent - for example a US company might base its EU business here, with other subsidiaries across Europe held through its Irish operation.

Previously international firms had been loath to establish such operations here, because they could get more favourable tax treatments in other locations.

The Finance Bill, being published this afternoon, enacts the measures announced on Budget day and sometimes also includes additional anti-evasion measures.

While the new tax rules to encourage holding companies and corporate headquarters to establish here are primarily designed to attract mobile foreign investment in this area, the rules will also benefit Irish industry. EU rules stipulate that reliefs cannot discriminate between businesses on the basis of their nationality.

There has been some speculation that the Minister for Finance, Mr McCreevy, could seek to restrict the availability of capital gains tax relief from the sale of subsidiaries by inserting a minimum cash limit that must be met before qualifying for the relief. This would have the effect of ensuring that smaller transactions, many of them by Irish companies, would not qualify.

The other main focus will be on the new research and development tax credit, which will allow up to 20 per cent of incremental spending in this area to be written off against tax.

The Bill is expected to ensure that a reasonable amount of spending will qualify for this relief, even if the Department of Finance will seek to ensure that only genuinely additional spending qualifies.

The Bill is expected to set a base year and rule that - for a period of years - spending in addition to that made in the base year will qualify for the relief. To encourage new investment in research facilities, it is expected to allow relief on capital spending on facilities, as well as ongoing spending on research and development programmes.