I move:
(1) THAT Part 16 (as amended by section 33(1)(a) of the Finance Act 2011 (No. 6 of 2011)) of the Taxes Consolidation Act 1997 (No. 39 of 2011) be amended in section 494(3) —
(a) in paragraph (a)(i), by substituting "and which carries on relevant trading activities from a fixed place of business in the State, or" for "where those activities are principally carried on in the State, or",
(b) in paragraph (a)(ii), by substituting the following for clause (II):
"(II) both the holding of such shares or securities or the making of such loans and the carrying on of relevant trading activities where relevant trading activities are carried on from a fixed place of business in the State.",
and
(c) by deleting paragraph (c).
(2) THAT section 33 of the Finance Act 2011 be amended by substituting the following for subsection (2):
"(2) (a) Subject to paragraphs (b) and (c), this section has effect in respect of shares issued on or after 25 November 2011.
(b) This section does not have effect in respect of shares issued before 25 November 2011 and, for all the purposes of Part 16 of the Principal Act in connection with those shares, the Principal Act has effect as if this section had not been enacted.
(c) This section does not have effect in respect of shares issued on or after 25 November 2011 and on or before 31 December 2011 where—
(i) the company issuing the shares, or
(ii) where the shares are acquired by an investment fund, the fund acquiring the shares,
elects by notice in writing to the Revenue Commissioners on or before 31 December 2011 that, for all the purposes of Part 16 of the Principal Act in connection with those shares, the Principal Act has effect as if this section had not been enacted.".
(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).
In the budget for 2011 and the Finance Act 2011, changes were made to the business expansion scheme, BES, which introduced a new employment and investment incentive, EII, intended to boost job creation by SMEs. This measure could not be given effect until the European Commission gave approval under the Community guidelines on state aid to promote risk capital investments in small and medium-sized enterprises. Recently, the Commission granted that approval subject to certain further legislative amendments. This financial resolution amends section 33 of the Finance Act 2011 to provide for these legislative amendments and commences that section.
November and December traditionally are the peak months for raising BES investments. In view of the extended timeframe involved in securing the approval of the European Commission, I have decided to allow both the BES and EII schemes to run concurrently until the end of this calendar year, that is, until 31 December 2011. The BES scheme will end on 31 December 2011. The EII scheme is scheduled to run until 31 December 2013. The new commencement provisions will therefore provide for relief under the new EII scheme to apply in respect of shares issued on or after 25 November 2011 and second, where shares are issued between 25 November 2011 and 31 December 2011, an election to be made in writing to the Revenue Commissioners indicating under which scheme, BES or EII, the shares are issued. This election will determine the scheme under which relief to investors may be granted.
