Dáil Éireann Debate, Thursday - 21 January 2021
88. Deputy Johnny Mythen asked the Minister for Finance the position regarding the orphan companies mainly attached to the entertainment and ticket industry regarding Covid-19 and employment wage subsidy scheme assistance; and if he will make a statement on the matter. [3451/21]
View answerThe Employment Wage Subsidy Scheme (EWSS) was legislated for under the Financial Provisions (Covid-19) (No. 2) Act 2020. The scheme is an emergency measure to deal with the impact of the Covid-19 pandemic on the economy and to deliver an enterprise support to employers based on business eligibility delivering a per-head subsidy on a flat rate basis.
As regards eligibility for the scheme, an employer must be able to demonstrate that his or her business will experience a 30% reduction in turnover or orders between 1 January and 30 June 2021, by reference to the corresponding period in 2019, as a result of business disruption caused by the Covid-19 pandemic. Additionally, the employer must have a tax clearance certificate to be eligible to join the EWSS and must continue to meet the requirements for tax clearance throughout the scheme. The scheme has no role in relation to the employer/employee relationship in regard to terms and conditions.
The EWSS provides a flat-rate subsidy to qualifying employers, based on the number of qualifying employees on the payroll. The EWSS is administered by Revenue on a 'self-assessment' basis and employers are required to undertake a review on the last day of every month to ensure they continue to meet the above eligibility criteria. Employers who, following a monthly review, find they no longer qualify should deregister for EWSS with immediate effect i.e. from the 1st of the following month.
The Deputy refers to orphan companies mainly attached to the entertainment and ticket industry. Without knowing the specific facts of each case it is difficult to determine eligibility based on this point. However, as regards the film industry, Designated Activity Companies (DACs) operate as a requirement under Section 481 of the Taxes Consolidation Act 1997, which provides a corporation tax credit for eligible expenditure on qualifying films.
It is not possible for Revenue to verify whether a specific DAC would qualify for the EWSS based on the eligibility criteria but given that all balancing funding for the production above the 32% tax credit must already be secured before claiming the credit, a reduction of earnings would not be evident at the outset.
Section 481 is administered by both the Department of Culture, Heritage and the Gaeltacht, in relation to the cultural and employment aspects, and Revenue, in relation to the quantum of the credit available. Further details re Section 481 can be found at:
https://www.revenue.ie/en/tax-professionals/tdm/income-tax-capital-gains-tax-corporation-tax/part-15/15-02-04.pdf.
Finally, guidelines on the operation of the EWSS including comprehensive information on employer eligibility and supporting proofs is available on the Revenue website at:
https://www.revenue.ie/en/corporate/communications/documents/ewss-guidelines.pdf.
