Michael McGrath
Question:180. Deputy Michael McGrath asked the Minister for Finance the first year cost of deferring income tax on share based remuneration for employees; and if he will make a statement on the matter. [34212/17]
View answerThursday, 13 July 2017
Questions (180, 181)
Michael McGrath
Question:181. Deputy Michael McGrath asked the Minister for Finance the first year cost of deferring income tax on share based remuneration for employees of small and medium-sized enterprises; and if he will make a statement on the matter. [34213/17]
View answerWritten answers
I propose to take Questions Nos. 180 and 181 together.
I am advised by Revenue that as share based remuneration, in general, is taxed under the PAYE system, it is not possible to separately identify the yield to the Exchequer from such share awards. There is therefore no basis to estimate the cost of deferring income tax on such remuneration for employees.
The Deputy may be interested in the ‘Cost of Tax Expenditures’ table published by the Revenue Commissioners and available at http://www.revenue.ie/en/corporate/information-about-revenue/statistics/tax-expenditures/costs-expenditures.aspx.
This table provides the cost of a number of share based remuneration incentive schemes from 2004 to 2014. The table will be updated shortly with the 2015 figures.
Similarly, there is no basis to estimate the cost of deferring income tax due on share based remuneration for employees of small and medium sized enterprises (SMEs), generally. However, as the Deputy will be aware, following a pubic consultation on the tax treatment of share based remuneration conducted in 2016, it was announced in the last Budget that work had commenced on the development of a new, SME-focussed, share-based incentive scheme, to be introduced in Budget 2018.
Work on this new incentive is ongoing. In this regard my officials are engaging with the European Commission to ensure that the incentive complies with EU State Aid rules, and it will be possible to provide an estimated cost for this targeted incentive when the relevant parameters are finalised.
Employee participation in their company’s ownership and profits has been shown to increase competitiveness and support employment and growth. The incentive to be introduced in Budget 2018, is expected to support Irish SMEs in the attraction and retention of key individuals, thereby helping those SMEs in the ongoing development of their businesses.
Question No. 182 answered with Question No. 177.