Dáil Éireann Debate, Tuesday - 23 June 2015
217. Deputy Seamus Kirk asked the Minister for Finance if he will provide a definition of a first time entrepreneur for the purposes of the startup relief for entrepreneurship scheme; and if he will make a statement on the matter. [24984/15]
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.
There is no definition of "first time entrepreneur" in the Act. However, the criteria to be considered a "specified individual" who may qualify for relief under SURE is contained in Section 495 of the Act.
Under that Section, an individual shall be a specified individual if he or she makes a qualifying SURE investment, i.e. an investment by way of the purchase of shares in a qualifying new business venture, and complies with the other provisions of the section which can be summarised as follows:-
The individual's income in the three years prior to the year preceding the year in which the SURE investment is made must have come primarily from employment sources. Specifically the individual's non-employment income in any of those years cannot exceed the lesser of:
- the aggregate of the individual's employment income, and
- €50,000.
However the individual's income in the year immediately preceding the year in which the SURE investment is made can be from any source.
The individual must enter a full-time employment for a 12 month period with the company either as an employee or a director starting within the year in which the investment is made or, if later, within 6 months of the date on which the share issue is made.
The individual cannot be employed elsewhere during this 12 month period (except where the aggregate amount of such other employment(s) is no more than 10 hours per week).
The individual must hold at least 15% of the issued share capital of the company in which s/he makes the SURE investment for 12 months after the issue of shares, or if the company is not trading at that time, from the date it begins to trade.
The individual must continue to hold his/her shares for a period of 3 years from the date of issue.
The individual must not receive any payments from the company other than reasonable remuneration and expenses in the 3 year period after the share issue.
In the 12 months immediately prior to the SURE investment the individual must not have held (or have been entitled to acquire either directly or indirectly) more than 15% of the share capital, loan capital or voting rights of any other company.
The individual must not be making the SURE investment for the sole purpose of avoiding tax.
Neither the individual nor the company may enter into any agreement, arrangement or understanding which could reasonably be considered to eliminate risk from the SURE investment.
The Deputy may be interested to know that there is a dedicated SURE website www.sure.ie which provides full information on the scheme. The website includes an on-line calculator, developed jointly by the Department of Jobs, Enterprise and Innovation and the Revenue Commissioners, which will assist SURE applicants in estimating the amount of any tax refund they may be able to claim under the provisions of the scheme.
