Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I move amendment No. 29:

In page 27, to delete lines 32 and 33 and substitute the following: “(a) in subsection (3)—

(i) by substituting “B-A” for “A-B”, and

(ii) by substituting “is the greater of” for “is the lesser of”,

and

(b) in subsection (4)—

(i) by deleting “(in this section referred to as the “relevant issue”)”,

(ii) by substituting “B-A” for “A-B”,

(iii) by substituting “is the greater of” for “is the lesser of”, and

(iv) by deleting “before the relevant issue”.”.

Amendment No. 29 is a technical amendment and is necessary to ensure that formulas provided in Part 16 of the Taxes Consolidation Act 1997 to allow companies availing of employment investment incentive, EII, correctly calculate the element of an investment that may be in excess of the limits permitted under the existing legislation. The purpose of the formula in section 497(3) is to enable a company availing of EII to identify an amount that would be in excess of the annual allowable investment limit of €5 million such that the excess would not be a qualifying investment. If a company was to use the formula as it stands, it would never result in an excess being identified. This is incorrect, as an excess will always exist if the aggregate investment in a 12 month period is greater than €5 million. The amendment will correct this and will allow a company identify an excess that may exist.

Similarly, the purpose of the formula in section 497(4) is to enable a company availing of EII to identify an amount that would be in excess of the lifetime allowable investment limit of €15 million, and once more than that, the excess would not be a qualifying investment. In light of the current formula, if this was to be implemented in practice, an excess would not be identified. The proposed amendment seeks to correct this by ensuring that Revenue looks at the greater of the lifetime limit or the total investments made, therefore ensuring, should it exist, that an excess is identified.

I take this opportunity to inform the select committee that I intend to bring forward an amendment on Report Stage to modify the current requirement in the Bill that an investor must hold EII shares for ten years or more in order to avail of tax relief on a maximum qualifying investment of €500,000.

On amendment No. 30, EII is a state aid measure operating within the European Union's general block exemption regulations and as such, it applies to all regions in the State. A regional variation of EII would require separate state aid approval from the European Commission. The package of measures that I have brought forward is meant for all regions of the country. While I absolutely appreciate the importance of the EII scheme to the midlands, I am also aware, as Deputy Denis Naughten's amendment identifies, of the very particular challenges that peat regions are facing in the Deputy's constituency and others in the midlands. I hope he is aware of the efforts that we have under way to deal with some of that, some of which will be funded by the change in carbon pricing. I cannot vary the effect of the EII scheme based on county.