I am advised by Revenue that 10 companies granted qualifying share options under the Key Employee Engagement Programme (KEEP) to employees during 2018 (the first year of the scheme).
In relation to the cost of the scheme to date, as no exercises of options have taken place to date, there has been no cost to the Exchequer in this regard. The KEEP legislation provides for an exemption from income tax, USC and PRSI on any gain realised on the exercise of a qualifying share option. Where share options are exercised, and the shares subsequently sold, the taxpayers involved will be subject to Capital Gains Tax on the disposal. It is not certain when the first exercises will occur. Generally, a key employee must hold the option for 12 months prior to exercise and therefore 2019 will be the earliest date that individuals are likely exercise their options to acquire shares in the qualifying companies. Returns for 2019 will not be filed with Revenue until 2020. In addition options may be exercised for up to 10 years from the date of grant.
The Deputy may also wish to be aware that my Department recently carried out a public consultation process in relation to KEEP (along with other tax incentives which can support to SMEs). The purpose of the consultation process was to provide an opportunity for interested parties to participate in a discussion which is intended to help ensure that KEEP fulfils its role in an efficient and effective manner.