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Job Initiatives

Dáil Éireann Debate, Thursday - 15 November 2012

Thursday, 15 November 2012

Questions (96)

Bernard Durkan

Question:

96. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which incentives or inducements will be provided to encourage those with substantial savings to invest in job creation; and if he will make a statement on the matter. [50798/12]

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Written answers

It is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions. However, I draw the Deputy’s attention to the following existing incentives in the tax code to encourage individuals to invest in schemes which can lead to job creation:

The Employment and Investment Incentive (EII)

The EII is a tax incentive that provides tax relief for investors who purchase new ordinary shares in small and certain medium-sized companies carrying on a trade, and who hold those shares for a minimum of three years. The incentive is designed to help companies to raise new risk capital to expand their activities. An individual investor can obtain income tax relief on investments up to a maximum of €150,000 per annum, subject to the high income individuals restriction, in each tax year up to 2013. The maximum amount that may be raised by a company in any 12-month period is €2.5 million, subject to a lifetime limit of €10 million. The maximum rate of tax relief available to an individual who subscribes for new ordinary shares is 30% of the amount invested. A further 11% tax relief may be available at the end of the holding period, however, provided the company concerned has either increased its number of employees or spent at least 30% of the investment raised on research and development.

The Seed Capital Scheme (SCS)

The SCS provides that an employee, who leaves employment and invests by means of shares in a qualifying new venture, may claim a refund of income tax paid in previous years. An unemployed person may also avail of this facility. The maximum investment that can be set against taxable income in any year of assessment is €100,000. This means that the maximum total investment that can be made under the Seed Capital Scheme is €600,000, as the individual may set up to €100,000 against the taxable income of each of the previous six years. By way of example, an individual who invests €10,000 under the scheme would be entitled to a refund of income tax already paid of €4,100 provided they had paid income tax at the higher rate in the relevant tax year.

Film Relief (Section 481)

The film relief scheme was introduced to promote the Irish film industry, by encouraging investment in Irish made films. Tax relief on the full amount of the investment is available to individual investors at their marginal rate of tax (41% for top rate taxpayers). Individual investors can invest up to €50,000 under the scheme in any year of assessment. The maximum amount which can be raised by a film production company, under the scheme is 80% of the total cost per production, subject to a maximum of €50,000,000.

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