Section 340 of the Taxes Consolidation Act, 1997, makes provision for the designation by order of areas immediately adjacent to seven regional airports as enterprise areas. The airports in question are Cork, Donegal, Galway, Kerry, Knock, Sligo and Waterford. The designation order may be made by the Minister for Finance after consultation with the Minister for Public Enterprise and following receipt of a proposal from or on behalf of a qualifying company intending to carry on qualifying trading operations immediately adjacent to a regional airport.
The Deputy is probably aware that in May 1997, in the context of State Aids, the Competition Directorate of the EU Commission sought detailed information on the new tax reliefs for regional airports and new enterprise areas provided in the Finance Act, 1997. This was on foot of an article in The Irish Times publicising the new schemes. The Commission then initiated a full investigation into the enterprise areas, including those six enterprise areas developed under the 1994 Finance Act. Last December, the Commission decided to approve the tax reliefs for existing and some new enterprise areas in the context of State Aids but the decision did not cover the regional airports enterprise areas scheme. EU officials have since informed my Department that the rates relief and double rent relief will not be approved by the Commission whenever a submission is made to them seeking EU approval for tax designation at any of the regional airport enterprise areas. However, it is understood there is no objection to the provision of capital allowances. Therefore, when projects for the airports enterprise areas are approved by the Irish authorities and areas are then designated, they will be submitted to the EU Commission for approval in respect of the capital allowances.
The approval of qualifying companies to operate in a regional airport enterprise area is through a certification process involving, inter alia, Forfás and the Ministers for Enterprise, Trade and Employment and Finance. The tax reliefs comprise of capital allowances of up to 100 per cent. on expenditure incurred on the construction or refurbishment of premises used by qualifying companies.