Michelle Mulherin (Mayo, Fine Gael)
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216. To ask the Minister for Finance the different types of professional service companies that are excluded from being qualified trading activities in the Start-up Relief for Entrepreneurs Scheme; and if he will make a statement on the matter. [24780/15]

Michael Noonan (Limerick City, Fine Gael)
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The legislation governing the operation of the Startup Refunds for Entrepreneurs (SURE) scheme, formerly known as the Seed Capital Scheme, is set out in Part 16 of the Taxes Consolidation Act 1997 (the Act). The scheme provides for a repayment of income tax paid in certain circumstances to individuals who cease full time employment, or who are unemployed, and invest in the start up of a new company engaged in relevant trading activities.

The definition of what is considered "relevant trading activities" is contained in Section 488 of the Act. This definition excludes a "close company" (essentially a company controlled by 5 participators or less) where such a close company is regarded as a service company under the provisions of section 441 of the Act.  

Section 441 of the Act defines a service company as including close companies where the principal part of the company's income is derived from:

- the carrying on directly of a profession;

- the provision of professional services;

or a company

- which has, or exercises, an office or employment.

Also included are:

- the provision of services or facilities to such companies, or

- the provision of services or facilities to an individual or partnership carrying on a profession.

However this latter category does not include cases where the services or facilities are provided for persons not connected with the company.

As the Taxes Acts do not define "profession" it must be given its ordinary meaning in accordance with the general principles of statutory construction. Case law has provided that the term 'profession' involves an occupation requiring either intellectual skill, as in sculpture or surgery, or a skill controlled by the intellectual ability of the operator.

The Revenue Commissioners have issued guidance on what is considered to be a Professional Service in . In that briefing Revenue specifically list the following activities as falling within the definition of professional services:-

Accountant

Actor

Actuary

Archaeologist

Architect

Auctioneer/Estate Agent

Barrister

Computer programmer

Dentist

Doctor

Engineer

Journalist

Management Consultant

Optician

Private School

Quantity Surveyor

Solicitor

Veterinary Surgeon.

While the above are considered to be providing professional services, the list is not intended to be an exhaustive list of all possible professions. Each case should be examined with regard to its own particular facts.

Full details on the scheme are available on www.sure.gov.ie.

Séamus Kirk (Louth, Fianna Fail)
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217. To ask the Minister for Finance if he will provide a definition of a first time entrepreneur for the purposes of the start-up relief for entrepreneurship scheme; and if he will make a statement on the matter. [24984/15]

Michael Noonan (Limerick City, Fine Gael)
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The legislation governing the operation of the Startup Refunds for Entrepreneurs (SURE) scheme, formerly known as the Seed Capital Scheme, is set out in Part 16 of the Taxes Consolidation Act 1997 (the Act). The scheme provides for a repayment of income tax paid in certain circumstances to individuals who cease full time employment, or who are unemployed, and invest in the start up of a new company.

There is no definition of "first time entrepreneur" in the Act. However, the criteria to be considered a "specified individual" who may qualify for relief under SURE is contained in Section 495 of the Act.

Under that Section, an individual shall be a specified individual if he or she makes a qualifying SURE investment, i.e. an investment by way of the purchase of shares in a qualifying new business venture, and complies with the other provisions of the section which can be summarised as follows:-

The individual's income in the three years prior to the year preceding the year in which the SURE investment is made must have come primarily from employment sources. Specifically the individual's non-employment income in any of those years cannot exceed the lesser of:

- the aggregate of the individual's employment income, and

- €50,000.

However the individual's income in the year immediately preceding the year in which the SURE investment is made can be from any source.

The individual must enter a full-time employment for a 12 month period with the company either as an employee or a director starting within the year in which the investment is made or, if later, within 6 months of the date on which the share issue is made.

The individual cannot be employed elsewhere during this 12 month period (except where the aggregate amount of such other employment(s) is no more than 10 hours per week).

The individual must hold at least 15% of the issued share capital of the company in which s/he makes the SURE investment for 12 months after the issue of shares, or if the company is not trading at that time, from the date it begins to trade.

The individual must continue to hold his/her shares for a period of 3 years from the date of issue.

The individual must not receive any payments from the company other than reasonable remuneration and expenses in the 3 year period after the share issue.

In the 12 months immediately prior to the SURE investment the individual must not have held (or have been entitled to acquire either directly or indirectly) more than 15% of the share capital, loan capital or voting rights of any other company.

The individual must not be making the SURE investment for the sole purpose of avoiding tax.

Neither the individual nor the company may enter into any agreement, arrangement or understanding which could reasonably be considered to eliminate risk from the SURE investment.

The Deputy may be interested to know that there is a dedicated SURE websitewhich provides full information on the scheme. The website includes an on-line calculator, developed jointly by the Department of Jobs, Enterprise and Innovation and the Revenue Commissioners, which will assist SURE applicants in estimating the amount of any tax refund they may be able to claim under the provisions of the scheme.

Séamus Kirk (Louth, Fianna Fail)
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218. To ask the Minister for Finance if the start-up relief for entrepreneurship scheme will extend to primary food sector industries in the agriculture sector, including pig, poultry, dairy and beef farming; and if he will make a statement on the matter. [24985/15]

Michael Noonan (Limerick City, Fine Gael)
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The legislation governing the operation of the Startup Refunds for Entrepreneurs (SURE) scheme, formerly known as the Seed Capital Scheme, is set out in Part 16 of the Taxes Consolidation Act 1997 (the Act). The scheme provides for a repayment of PAYE in certain circumstances to individuals who cease full time employment, or who are unemployed, and invest in the start up of a new company engaged in relevant trading activities.

"Relevant trading activities" are defined in section 488 of the Act as activities carried on in the course of a trade the profits or gains of which are charged to tax under Case I of Schedule D subject to certain exclusions, such as for example, professional services. Investment in a start-up company operating in the primary food sector industries in the agriculture sector, including pig, poultry, dairy and beef farming may currently qualify for SURE, subject to the company meeting the criteria provided for in sections 488 and 494 of the Act.

In this context the company must:

- be a "qualifying new venture". This means that as well as carrying on a qualifying trade it must be a new company i.e. less than two years old (from incorporation), and it must not have taken over an existing trade;

- be incorporated in the State or in another EEA State;

- be an unquoted company;

- be tax resident in the State or in another EEA State and carry on business in the State through a branch or agency;

- carry on relevant trading activities from a fixed place of business in the State;

- be a micro, small or medium-sized enterprise;

- have its issued share capital fully paid up. It should be noted that the share capital must remain fully paid up throughout the three years following investment i.e. all issued shares must be paid for in full; and

- use the amounts invested under the scheme for the creation and maintenance of employment and for the benefit of a qualifying new venture in the carrying on of its trading activities, or in the case of a company that has not commenced to carry on relevant trading activities, on research and development activities.

The company must not:

- have any special trading arrangements with the SURE investors' former employer company, or a company related to that former employer company. Normal business transactions are, however, acceptable, provided these are conducted on an arms-length basis.

- carry on a trade which is similar to any other trade in respect of which the SURE investor has or has had a controlling interest.

- be considered as a firm in difficulty for the purposes of the Community Guidelines on State aid for rescuing and restructuring firms in difficulty.

- control or be controlled by any other company, with the exception of controlling a qualifying subsidiary.

Further details on the scheme are available on www.sure.gov.ie.