Dáil Éireann Debate, Tuesday - 28 June 2022
213. Deputy Seán Canney asked the Minister for Finance if he is supports restructuring the key employee engagement programme given that in its current format it remains too complicated and restrictive for use by SMEs; and if he will make a statement on the matter. [34473/22]
Amharc ar fhreagra226. Deputy Seán Canney asked the Minister for Finance if he intends to reform and restructure the KEEP scheme; and if he will make a statement on the matter. [34472/22]
Amharc ar fhreagraI propose to takes Questions Nos. 213 and 226 together.
Section 128F of the Taxes Consolidation Act 1997 provides for the Key Employee Engagement Programme (KEEP), a targeted tax incentive for SMEs to support the use of share options as a form of staff remuneration. In order to qualify for KEEP, a share option must be exercised within 10 years of grant. Under KEEP, gains realised on the exercise of qualifying share options granted between 1 January 2018 and 31 December 2023 by employees and directors, will not be subject to income tax, USC or PRSI. Instead, where share options are exercised, the taxpayer involved will be subject to Capital Gains Tax on the disposal.
As part of the preparations for Budget 2023 and Finance Bill 2022, my Department is currently undertaking a review of KEEP, with a focus on its operation and effectiveness. A public consultation took place as part of this review, inviting stakeholders to comment on the operation of KEEP as it currently stands and submit proposals for further improvements to the scheme.
The outcome of the review will be considered as part of the forthcoming the Budget and Finance Bill processes. As noted in the recent documentation issued as part of the public consultation process, the aim is to have a scheme in place which successfully supports the objective of allowing smaller firms to compete with larger firms when it comes to the hiring and retention of staff.
It would not be appropriate to comment further at this point.
