Dáil Éireann debate -
Wednesday, 28 Jan 1998

Vol. 486 No. 1

Written Answers. - Knock Airport Tax Designation.

Jim Higgins

Question:

73 Mr. Higgins (Mayo) asked the Minister for Finance the tax regime that applies to the designation of Knock Airport; the number of investors who have applied for tax concessions under the scheme; and if he will make a statement on the matter. [1808/98]

Jim Higgins

Question:

75 Mr. Higgins (Mayo) asked the Minister for Finance the date for which the designation of Knock Airport for special tax designation purposes applies; and if he will make a statement on the matter. [1807/98]

Minister for Finance (Mr. McCreevy):

I propose to take Questions Nos. 73 and 75 together.

Three new enterprise areas were designated under section 26 of the Finance Act, 1997. The same section makes provision for the designation by order of areas immediately adjacent to seven regional airports, including Knock Airport, as enterprise areas.

The designation order will be made by the Minister for Finance after consultation with the Minister for Public Enterprise and following receipt of a proposal from or on behalf of a company intending to carry on qualifying trading operations.

Qualifying trading operations are (a) manufacturing companies which qualify under the Finance Acts for 10 per cent Corporation Tax and (b) internationally traded service activities i.e. data processing, software development, technical and consulting, commercial laboratory, healthcare, research and development, media recording, training, publishing, financial and administrative headquarters. Companies must also have been approved for financial assistance by the State industrial development agencies — Forbairt or IDA Ireland. The tax reliefs for the enterprise areas are those set out in section 35 of the Finance Act, 1995 and include capital allowances of up to 100 per cent on expenditure incurred on the construction or refurbishment of premises used by qualifying companies as well as a double rent allowance for ten years for the lessees of such premises.

The Deputy will be aware that the EU Commission raised queries about the State aid aspects of enterprise areas. I issued a statement on this matter last July. Last month I issued a further statement announcing that the EU Commission had decided to approve the tax reliefs for enterprise areas in the context of State aids. However, the Commission's decision does not cover the enterprise areas adjacent to regional airports.

The designation of the regional airport areas depends on specific projects being proposed for each area. When such projects come forward and are approved by the relevant authorities, the individual enterprise areas will be designated and submitted to the EU Commission for its approval. It should be noted that under the Commission's decision, the provisions for all of the enterprise areas covered by the 1997 Finance Act will have to terminate on 31 December 1999 instead of 30 June 2000. To date, no specific proposal from or on behalf of a company intending to carry on qualifying trading operations adjacent to Knock Airport has been submitted to me.