Seanad debates
Saturday, 29 January 2011
Finance Bill 2011 (Certified Money Bill): Report and Final Stages
6:00 pm
Eugene Regan (Fine Gael)
I move recommendation No. 4:
In page 167, line 7, to delete "accounting periods" and substitute the following:
"a company which sets up and commences a qualifying trade".
This is another technical recommendation which I propose in order to correct oversights in the Bill. Previous amendments have been rejected.
Section 486C of the Taxes Consolidation Act 1997 provides for relief from tax for certain start-up companies. There is a three-year tax exemption for start-up companies which do not earn profits of over €320,000. There have been changes in that provision so that at the end of the three-year period companies must now pay a certain amount of PRSI to create certain employment, which is laudable.
The question is whether it was intended - I do not think it was - that this would have retrospective effect, that those who started a company in 2009 or 2010 would now find that they have additional conditions to meet which were not in place when they first availed of this scheme. It was a three-year tax break whereas now they find, having established a new business, that they have conditions retrospectively applied to them. That is by reason of section 34(2) of the Bill, which states: "Subsection (1)has effect in relation to accounting periods beginning on or after 1 January 2011."
I would point out to the Minister that there is reference in the Bill to "a company which sets up and commences a qualifying trade in 2011". I think that provision was intended to be carried forward generally.
The recommendation is not to have the reference to accounting periods beginning on or after 1 January 2011, but rather to have reference to a company which sets up and commences a qualifying trade beginning on or after 1 January 2011. The recommendation is designed to correct what I think is an oversight regarding a retrospective effect, which is apparent from the wording of this provision and which was not necessarily intended.
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