I propose to take Questions Nos. 221 and 225 together.
The provisions of section 31 of the Finance (No 2) Act 2008 provide for relief from corporation tax for their first 3 years of operation for companies incorporated on and from 14 October 2008 that commence to carry on a new trade in 2009. The relief is granted by reducing the corporation tax on the profits of the new trade and on the gains from disposal of assets used for the purpose of the new trade to nil. Full relief is available where the corporation tax otherwise payable by the company in respect of any of its first 3 years is €40,000 or less. There is marginal relief where the corporation tax liability is between €40,000 and €60,000.
The intention is that this relief will comply with the EU de minimis Aid Regulations. These Regulations set the level of de minimis aid available, generally, at €200,000 over any three year period. In the case of the road transport sector, the figure is €100,000. Any tax relief under the provisions of section 31 of Finance (No 2) Act 2008 will affect the amount of further State aid that a company can receive. The requirement that the company be newly registered ensures that we are starting at the beginning as regards State aids. In addition, with the new company requirement, the new trade will be easily distinguishable from other businesses run by a promoter and/or other related companies which is important so as to ensure against any abuse of the measure.
For these reasons, I had to choose a date to define a "new company" under the legislation and incorporation from the date of Budget 2009 is a reasonable approach. I have received some representations in this issue. However, I do not propose to amend this requirement of the legislation.