Richard Bruton (Dublin North Central, Fine Gael) | Oireachtas source

I move:

(1) THAT, for the purposes of the employment and investment incentive and seed capital scheme, Part 16 of the Taxes Consolidation Act 1997 (No. 39 of 1997) be amended with effect from, and in respect of shares issued on or after, 13 October 2015 as follows:(a) in section 488(1)—

(i) by deleting the definitions of “average relevant amount” and “average threshold amount”,

(ii) in the definition of “eligible shares” by substituting “the relevant period” for “the period of 3 years beginning on the date on which they are issued”,

(iii) by substituting the following for the definition of “qualifying employee”:

‘qualifying employee’, in relation to a qualifying company, means an employee (within the meaning of section 983), other than a director, of that company—

(i) who throughout his or her period of employment with that company is employed by that company for at least 30 hours duration per week, and

(ii) his or her employment is capable of lasting at least 12 months;”,

and

(iv) by inserting the following definitions:

“ ‘qualifying nursing home’ means –

(a) a nursing home within the meaning of section 2 of the Health (Nursing Homes) Act 1990 and which is registered under section 4 of that Act, and

(b) where applicable, a qualifying residential unit constructed on the site of, and operated by, a nursing home within the meaning of paragraph (a),

but does not include any nursing home or qualifying residential unit which is subject to any power on the exercise of which the nursing home or residential units, or any part or interest in the nursing home or residential units, may be revested in the person from whom it was purchased or exchanged or in any person on behalf of such person;

''qualifying residential unit’ means a house which—

(a) is constructed on the site of, or on a site which is immediately adjacent to the site of, a registered nursing home,

(b) is—

(i) a single storey house, or

(ii) a house that is comprised in a building of one or more storeys in relation to which building a fire safety certificate under Part III of the Building Control Regulations 1997 (S.I. No. 496 of 1997) is required, and prior to the commencement of the construction works on the building, is granted by the building control authority (within the meaning of of the ) in whose functional area the building is situated where—

(I) the house is, or (as the case may be) the house and the building in which it is comprised are, designed and constructed to meet the needs of persons with disabilities, including in particular the needs of persons who are confined to wheelchairs, and

(II) the house consists of one or two bedrooms, a kitchen, a living room, bath or shower facilities, toilet facilities and a nurse call system linked to the registered nursing home,

and

(c) is comprised in a development where—

(i) those units are operated or managed by the registered nursing home and an on-site caretaker is provided, and

(ii) back-up medical care, including nursing care, is provided by the registered nursing home to the occupants of those units when required by those occupants;

‘relevant amount’ means total emoluments (other than non-pecuniary emoluments) paid by a qualifying company to qualifying employees as referred to in the definition of employment relevant number, in the year of assessment in which, in relation to a subscription for eligible shares, a relevant period ends;

‘threshold amount’ means the total of the emoluments (other than non-pecuniary emoluments) paid by a qualifying company to the qualifying employees referred to in the definition of employment threshold number, in the year of assessment preceding the year of assessment in which the subscription for eligible shares was made but where there was a general reduction in the basic pay rate of qualifying employees then the threshold amount shall be reduced accordingly;”;

(b) in section 489 –

(i) by substituting the following for subsection (1)(b):

“(b) those shares are issued to the individual for the purpose of raising money by a qualifying company where that money was used, is being used or is intended to be used by the qualifying company –

(i) for the purposes of carrying on relevant trading activities,

(ii) in the case of a company which has not commenced to trade, in incurring expenditure on research and development within the meaning of section 766, or

(iii) in the case of a company that owns and operates a qualifying nursing home, for the purposes of enlarging the capacity of the qualifying nursing home,

and",

and

(ii) by substituting the following for subsection (10)(a):

“(a) (i) the employment relevant number exceeds the employment threshold number by at least one qualifying employee, and

(ii) the relevant amount exceeds the threshold amount by at least the total emoluments of one qualifying employee in the year of assessment in which the relevant period ends,

or";

(c) in section 494 –

(i) by inserting the following after subsection (4):

“(4A) A company that does not meet the requirements of paragraphs 5 and 6 of Article 21 of Commission Regulation (EU) No 651/2014 of 17 June 2014 shall not be a qualifying company.”, and

(ii) by inserting the following after subsection (7):

“ (7A) A company whose relevant trading activities includes operating a qualifying nursing home and is engaged in enlarging its capacity pursuant to section 489(1)(b)(iii) shall cease to be a qualifying company unless it has expended all of the money subscribed for eligible shares on such activities, within a period ending 30 days before the end of the relevant period.”.

(2) THAT, for the purposes of the employment and investment incentive and seed capital scheme, section 27 of the Finance Act 2014 (No. 37 of 2014) be amended with effect from, and in respect of shares issued on or after, 13 October 2015 as follows:(a) in subsection (1)(a)(ii)(d) by deleting the word “average”;

(b) in subsection (1)(g) by substituting “Article 11 of Commission Regulation (EU) No 651/2014 of 17 June 2014 OJ No. L 187, 26.06.2014, p. 1” for “section 5.4 of the Community Guidelines on State aid to promote risk finance investments³”;

(c) in subsection (2) by substituting the following for paragraph (b):

“(b) Paragraphs (a) and (c) to (g) of subsection (1) have effect in respect of shares issued on or after 13 October 2015.”.

(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

The purpose of the resolution is to extend the scope of the employment and investment incentive scheme and it will take effect from today. This change required state aid approval from the European Commission, which has been obtained, which is why we are now moving the resolution.

As Members are probably aware, this is an incentive scheme that allows investment in initiatives within companies that promote research and development, marketing, more employment and missions abroad - measures that will help a company to grow and expand its employment base. Under the changes proposed, the ceiling for investment in an individual company is being doubled to €5 million per year, with a lifetime cap of €15 million.

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The scheme offers tax relief to investors of 30% upfront and an additional 10% after three years if extra employment has occurred or if the money all has been spent on research and development.

This is a useful scheme that has started to grow. Last year, approximately 1,400 companies availed of the support of the scheme and it helped them to grow their employment base. One additional provision here is that an extension is being made to cover nursing homes in respect of extensions they undertake. Up to now, nursing homes were covered in respect of the operation and management of the nursing home but from now on, an extension, as well as a refurbishment, can be acceptable under the terms of the scheme. This proposal was recommended by economic consultants who reviewed the operation of the scheme on behalf of the Department of Health. It is a useful instrument for improving access to finance for smaller and medium-sized enterprises and I hope it commends itself to the House.

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