As part of an ongoing process to support entrepreneurship and start-up companies generating employment, I announced on Budget day the introduction of the Key Employee Engagement Programme, a new, SME-focused, share-based remuneration incentive scheme.
Under this incentive, gains arising to the employee on the exercise of the share options will be subject to tax when the employee subsequently disposes of the shares and will be subject to Capital Gains Tax, currently at 33%. In the absence of this incentive, the share-option gain would be liable to income tax, USC and PRSI at the time of the exercise of the option.
As referred to by the Deputy, State Aid approval is required as the scheme is a targeted incentive limited to companies of a certain size and/or type. Full State Aid approval has been sought, engagement with the Commission is ongoing and is expected to conclude shortly. I am not aware that there are any issues in this regard.
The 2018 Budget booklet contains information on the scheme (Annex E of the Tax Policy Changes section) and full details will be published in the Finance Bill later this week.
