Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I move amendment No. 40:

In page 67, subsection (1)(h), line 31, to delete “subsection” and substitute “section”.

This section introduces a scheme of accelerated capital allowances for the construction and refurbishment of certain specialist buildings and structures for the use in the maintenance, repair or overhaul of commercial aircraft. The tax relief which will apply under this scheme will commence by ministerial order and will operate for five years from the date of the order. The approval of the European Commission, from a state aid perspective, will be necessary before the scheme can commence. The scheme will apply not only to the specialist hangars which are required but also to the tear-down pads and other facilities that are necessary for this sector to develop.

The details of the relief are as follows. The allowances will apply at a rate of 15% per annum for six years and 10% in year seven in respect of eligible expenditure. The normal restrictions will be imposed on sideways setting of unused capital allowances against other income. Equally, there will be no exemption from the current treatment of the termination of the carry-forward of certain losses which apply to capital allowance remaining unused after the end of the tax life of the building where the investor is in receipt of rental income from the facilities or is not actively engaged in the business. Furthermore, the high earners restriction, which applies across the full range of reliefs of this nature, will also apply in this case.

As stated in the budget speech, there is a potential for significant job creation in the aviation sector in Ireland.

I believe that by providing for this targeted incentive, we can attract additional aviation sector organisations into this country. This can encourage the development of centres of excellence within this engineering sector on which we can build from the perspective of job creation in the future. While this incentive was, to begin with, proposed as part of the strategy to secure the long-term viability of Shannon Airport, the scheme of relief which I am introducing is not restricted to Shannon and is applicable at all other airports.