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

I move amendment No. 39:

In page 36, line 12, to delete “and”.

Part 16 of the Taxes Consolidation Act 1997 provides reliefs for investment in corporate trades. These reliefs are the employment investment incentive, EII; the start-up relief for entrepreneurs, SURE; and the start-up capital incentive, SCI. These measures are key incentives which seek to provide SMEs and start-ups with an alternative risk-based source of funding, which helps to support the creation and retention of employment in SMEs across the economy. The latest statistics provided by Revenue show that in 2022 there were 2,995 EII investors with €125 million invested in EII-eligible companies.

These reliefs are State aid that come under the terms of Regulation (EU) No. 651/2014, known as the state aid general block exemption regulation, GBER, which allows certain categories of state aid to be granted without prior notification by member states. The revised GBER was adopted by the European Commission on 1 July 2023, and member states were granted a six-month transition period to implement necessary changes to domestic legislation to ensure relevant schemes continue to be compatible with the revised GBER. The purpose of the revised GBER is to further facilitate, simplify and speed up support for the EU's green and digital transitions and to ensure the GBER complements a set of state aid guidelines that have recently been revised.

Section 31 of the Bill amends Part 16 of the 1997 Act in order to reflect the revision of the GBER. In addition, as announced in my speech on budget day, I am making a number of changes to enhance the EII which have already been set out in the context of the budget.

The new relief for investment in innovative enterprises under Chapter 6A of Part 19, known as angel investor relief, which was introduced on Committee Stage, falls under Article 21a of the revised GBER. Accordingly, the limit of €16.5 million on the amount of risk finance investment that may be raised by an eligible undertaking under the revised GBER includes any amount that is raised under either or both Part 16 or the angel investor relief under Chapter 6A of Part 19.

The proposed Report Stage amendment of section 31, which relates to Part 16 relief for investments in corporate trades, is to provide that the €16.5 million limit on the amount of risk finance investment that may be raised by an eligible undertaking under the revised GBER applies to the cumulative amount of risk finance investment that may be raised under both Part 16 and the new angel investor relief under Chapter 6A of Part 19.

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