Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 3:

In page 11, to delete lines 16 to 21 and substitute the following:

"company, and

(b) whose business consists wholly or mainly of the holding of shares only in the following (and no other companies), namely, its qualifying subsidiary or subsidiaries and where it has a relevant subsidiary or subsidiaries, in that subsidiary or in each of them;",".

We discussed this on Committee Stage. Although I will not labour the point, I wanted to raise it again on Report Stage to see if there has been any evolution in the thinking of the Minister or his Department. This is a technical matter relating to the key employee engagement programme, KEEP, scheme and the changes introduced as part of this Finance Bill. It is fair to say they have been broadly welcomed. The matter I raised on Committee Stage relates to the definition of a holding company.

As I pointed out on Committee Stage, it is common for a new business to start as a single trading entity and then, as the business expands into new territories or delivers new products, it can become necessary from a commercial perspective to incorporate new entities. Very often, such new entities are established as subsidiaries of the original trading companies. As that type of business grows, the original trading company remains as is and becomes both the holder of shares in newer trading subsidiaries as well as being a trader. These types of businesses do not typically put in place a company whose sole or main business is to hold shares and their stage of development may not warrant a holding company or it may not be commercially necessary to do so. The complexity and cost involved in undertaking a group restructure just to put a holding company in place would also be a factor for these types of businesses. The concern is that the restrictive holding company definition that continues in the Finance Bill as it stands will exclude some small businesses for which the KEEP scheme could be a very positive change. This is a key issue.

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