The Living City Initiative, announced in Finance Bill 2013, is a pilot project which provides certain tax incentives to make it more attractive for people to live in historic and culturally significant city centre houses. The initiative also offers incentives for retailers and small businesses in those areas. This Initiative is subject to EU State Aid approval and a commencement order. An ex ante cost benefit analysis was conducted in the summer of 2013 and published alongside Budget 2014. An application for EU State Aid approval was submitted in March 2013. This application is still outstanding, but my officials are aiming to meet the relevant Commission officials in the near future. An independent cost-benefit analysis concluded that the Initiative would create more than 1,000 jobs for each of the 5 years it will be in place. The analysis also concluded that the annual cost would be in the order of €3m per year.
The Film relief scheme has been in place since 1987. Finance Act 2013 introduced new provisions to ensure that Film tax reliefs will accrue to the producers rather than investors and result in tax savings for the Exchequer. Budget 2014 extended the definition of 'eligible individual' to include non-EU talent, in conjunction with the introduction of a withholding tax. It is intended to commence these provisions once EU State Aid approval has been given. The Department of Arts, Heritage and the Gaeltacht are progressing this State Aid approval with the EU Commission. Statistics are not available to show the actual number of persons employed in the film industry. However, it is estimated that in 2013 just over 27,000 individual employments (both part-time and full-time) were generated on film productions supported by Section 481 relief.
A capital gains tax relief for entrepreneurs who reinvest the proceeds from the disposal of assets made on or after 1 January 2010 in certain chargeable business assets was announced in Budget 2014 and provided for in Section 45 of Finance (No 2) Act of 2013. The section requires a Commencement Order, which has not been made. Commencement of the legislative provisions is subject to EU state-aid approval. A pre-notification of state aid was made to the Commission on 20 February last. The purpose of the pre-notification is to facilitate the easier passage of the measure through any formal State-aid notification. The Commission were in touch with officials from my Department recently and wish to discuss the pre-notification details. Discussions are scheduled to take place this week. The measure will have no tax cost until 2017 at the earliest and is tentatively estimated to have a tax cost of €20 million in 2018. The measure is intended to encourage entrepreneurship and the number of jobs created will be dependent on the success or otherwise of the enterprises created with the support of the measure.
A tax scheme for the construction or refurbishment of certain aviation services facilities, as provided for in Finance Act 2013, is subject to EU approval. This measure was announced as part of Budget 2013. An application was made to the EU Commission on 18 June 2013. A meeting was held with officials in the Commission on 6 March 2014. It is not possible to estimate the cost to the Exchequer due to a number of variables such as the cost to build each hangar, whether the relief is claimed by a company or an individual or how many years the relief is claimed over.
Exemption from Stamp Duty on the transfer of shares of companies listed on the Enterprise Securities Market of the Irish Stock Exchange, is subject to EU approval. This measure was announced as part of Budget 2014. A pre-notification of state aid was made to the EU Commission on 4 February 2014. Further information was furnished to the Commission, at its request, on 7 March 2014. The estimated Exchequer cost is €5m and the proposed measure aims to encourage entrepreneurs and growing businesses to use public equity markets as a source of funding for growth and the creation of jobs.