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EU State Aid Negotiations

Dáil Éireann Debate, Tuesday - 27 May 2014

Tuesday, 27 May 2014

Ceisteanna (7)

Denis Naughten

Ceist:

7. Deputy Denis Naughten asked the Minister for Finance the actions being taken to obtain EU approval for economic incentives which have been announced by Government; and if he will make a statement on the matter. [22175/14]

Amharc ar fhreagra

Freagraí scríofa

The Living City Initiative, outlined in the Finance Act 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 and officials have been in communication with the Commission since then.

The Film relief scheme has been in place since 1987. The 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.

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. Officials from my Department and the Revenue Commissioners discussed the pre-notification details with the Commission recently. Further consultation is due to take place shortly in order to advance this matter.

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 and an application was made to the EU Commission on 18 June 2013. Since then discussions have been ongoing with the Commission with a view to securing the necessary approval. A meeting was held with officials in the Commission on 6 March 2014 in relation to issues they had with the scheme and discussions continue with a view to resolving those issues and receiving approval as soon as possible.

An exemption from Stamp Duty on the transfer of shares of companies listed on the Enterprise Securities Market of the Irish Stock Exchange was announced as part of Budget 2014. This measure is subject to EU approval.  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. A reply from the European Commission on 14th May last (in response to follow up from my officials) indicated that certain issues required further clarification.  My officials are in the process of responding to the Commission and progressing the matter.  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.

Questions Nos. 8 and 9 answered orally.
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