Dáil Éireann Debate, Tuesday - 18 September 2012
187. Deputy Dara Calleary asked the Minister for Finance the maximum relief for the business expansion scheme; if this has changed since the budget; if the conditions have changed; and if he will make a statement on the matter. [37384/12]
View answerBudget 2011 replaced the Business Expansion Scheme (BES) with the Employment and Investment Incentive (EII) subject to EU approval. That approval was received from the European Commission in November 2011. The new incentive is available in respect of investments made on or after 25 November 2011. EII (like BES) is a tax incentive that provides tax relief for investors who purchase new ordinary shares in small and medium companies carrying on a trade. The purpose of EII is to enable companies raise new capital to expand their activities. The scheme allows an individual investor to obtain income tax relief on investments up to a maximum of €150,000 per annum (unchanged from BES) in each tax year up to 2013. The main differences between EII and BES are as follows: the maximum amount that may be raised by a company in any 12 months has increased from €1.5m to €2.5m; the lifetime amount that may be raised by a company has increased from €2m to €10m; the period for which shares are required to be held has been reduced from 5 years to 3 years; the maximum rate of tax relief for subscriptions for eligible shares has been reduced from 41% to 30%, in recognition of the reduced holding period; a further 11% of tax relief may be available at the end of the holding period provided the company concerned has increased its number of employees or its expenditure on research and development.
Unlike BES, which was limited to companies carrying on a restricted number of trades, EII applies to companies carrying on all types of trades— with a small number of exclusions, including managing hotels/guest houses/nursing homes, financing activities and dealing in or developing land.
