Thursday, 4 July 2019

Questions (83, 84)

Michael McGrath

Question:

83. Deputy Michael McGrath asked the Minister for Finance the estimated annual cost of removing the 30% share ownership restriction for the EIIS; and if he will make a statement on the matter. [28761/19]

View answer

Michael McGrath

Question:

84. Deputy Michael McGrath asked the Minister for Finance the estimated annual cost of increasing the annual cap for the EIIS from €150,000 to €1 million; and if he will make a statement on the matter. [28762/19]

View answer

Written answers (Question to Finance)

I propose to take Questions Nos. 83 and 84 together.

In order to ensure compliance with Article 21 of the Group Block Exemption Regulation ("GBER")(Commission Regulation N°651/2014), the 30% share ownership restriction on connected persons was removed in Finance Act 2017.

GBER requires that risk finance aid schemes such as the EII should be restricted to independent private investors and not provide relief to persons with close connections to the undertaking. The change came into effect on 2 November 2017 and at the time of the announcement it was estimated that the saving for the Exchequer would be between €6 million and €10 million based on 2016 data. This represents the latest available estimate of the effect of the change.

I am also advised by Revenue that based on investments made under the EII for each tax year to date, the additional cost of increasing the cap on relief as suggested by the Deputy is as set out in the following table:

Tax Year

Additional Cost €m*

2012

1.1

2013

0.8

2014

2.2

2015

3.0

2016

2.1

2017

0.7

*These figures are based on actual data and assume that there is no change in investments or behavioural patterns resulting from the proposed change.