Dáil Éireann Debate, Tuesday - 22 February 2022
51. Deputy Ged Nash asked the Minister for Finance if an update will be provided on his plans to reform the way in which capital gains are treated under the Key Employee Engagement Programme; the cost of the programme to the Exchequer for each year from 2017 to 2021; and if he will make a statement on the matter. [9483/22]
View answerUnder the Key Employee Engagement Scheme (KEEP) incentive, gains realised on the exercise of qualifying share options granted between 1 January 2018 and 31 December 2023 by employees and directors, will not be subject to income tax, USC or PRSI. In order to qualify for KEEP, an option must be exercised within 10 years of grant. The gain will however be subject to Capital Gains Tax on subsequent disposal of the shares. This can result in a saving for scheme participants; this is the point of the scheme and notwithstanding the information about the proposed review below, there are no plans to fundamentally alter this aspect.
The cost to the Exchequer of KEEP for the year 2019 was €78,000 and for the year 2020 it was €186,000. As no exercise of share options occurred during the years 2017 and 2018, there was no cost to the Exchequer in terms of income tax, USC and PRSI for those years. Details of the cost to the Exchequer for 2021 will only be available once the employer returns for that year have been received and processed. The 2021 return is due by 31 March 2022.
Finally, in the course of the current year and ahead of Budget 2023, my Department intends to review the KEEP scheme, focussing on its operation and effectiveness.
