Dáil Éireann Debate, Wednesday - 16 January 2013
171. Deputy Finian McGrath asked the Minister for Finance if he will provide an update on the possible seed capital for a new business setting up in the the northside; and if he will advise on where finances may be applied for. [1596/13]
View answerThe Seed Capital Scheme allows an individual, who makes a qualifying investment in a company, to set off the amount of that investment against his or her taxable income in any of the previous 6 years. The activities of the company are required to constitute a qualifying new venture. The individual is required to take up full-time employment with the company and to hold at least 15% of the issued ordinary share capital for the required holding period, which is usually three years. The scheme has been considerably simplified for investments made on or after 25 November 2011.
The following is an example of the way the scheme works in the case of an individual who invests €20,000 in a qualifying company on 01/01/2013:
The individual may set off the amount of that investment against his or her taxable income in any of the previous 6 years. The individual nominates, say, 2009 as the refund year and makes a claim to Revenue’s Incentives Branch on the relevant forms providing details of the company concerned and the investment. If the individual earned €20,000 in 2009 that was taxed at the higher rate of income tax (41%), where that tax has not been repaid by reference to any other scheme or relief, he or she will receive a refund of tax of €8,200 i.e. 41% of €20,000.
I understand that the Deputy has asked a similar question of the Minister for Jobs, Enterprise and Innovation who has responsibility for certain State Agencies such as Enterprise Ireland. Further information on possible sources of funding may be set out in the response from the Minister.
