Dáil Éireann Debate, Tuesday - 23 June 2015
216. Deputy Michelle Mulherin asked the Minister for Finance the different types of professional service companies that are excluded from being qualified trading activities in the startup relief for entrepreneurs scheme; and if he will make a statement on the matter. [24780/15]
View answerThe legislation governing the operation of the Startup Refunds for Entrepreneurs (SURE) scheme, formerly known as the Seed Capital Scheme, is set out in Part 16 of the Taxes Consolidation Act 1997 (the Act). The scheme provides for a repayment of income tax paid in certain circumstances to individuals who cease full time employment, or who are unemployed, and invest in the start up of a new company engaged in relevant trading activities.
The definition of what is considered "relevant trading activities" is contained in Section 488 of the Act. This definition excludes a "close company" (essentially a company controlled by 5 participators or less) where such a close company is regarded as a service company under the provisions of section 441 of the Act.
Section 441 of the Act defines a service company as including close companies where the principal part of the company's income is derived from:
- the carrying on directly of a profession;
- the provision of professional services;
or a company
- which has, or exercises, an office or employment.
Also included are:
- the provision of services or facilities to such companies, or
- the provision of services or facilities to an individual or partnership carrying on a profession.
However this latter category does not include cases where the services or facilities are provided for persons not connected with the company.
As the Taxes Acts do not define "profession" it must be given its ordinary meaning in accordance with the general principles of statutory construction. Case law has provided that the term 'profession' involves an occupation requiring either intellectual skill, as in sculpture or surgery, or a skill controlled by the intellectual ability of the operator.
The Revenue Commissioners have issued guidance on what is considered to be a Professional Service in Tax Briefing No. 48. In that briefing Revenue specifically list the following activities as falling within the definition of professional services:-
Accountant
Actor
Actuary
Archaeologist
Architect
Auctioneer/Estate Agent
Barrister
Computer programmer
Dentist
Doctor
Engineer
Journalist
Management Consultant
Optician
Private School
Quantity Surveyor
Solicitor
Veterinary Surgeon.
While the above are considered to be providing professional services, the list is not intended to be an exhaustive list of all possible professions. Each case should be examined with regard to its own particular facts.
Full details on the scheme are available on www.sure.gov.ie.
