Peter Burke (Longford-Westmeath, Fine Gael)
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34. To ask the Minister for Finance the timeframe for small business to be approved by the Revenue Commissioners for the EII scheme; if he will address the delay for a company (details supplied) in County Longford; and if he will make a statement on the matter. [42715/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Employment and Investment Incentive (“EII”) scheme, found in Part 16 of the Taxes Consolidation Act 1997, is a tax incentive whereby individuals who invest in certain qualifying companies obtain tax relief on the amount invested. 

The entitlement to relief under the scheme is determined after the SME has issued shares to a qualifying investor. However, I am advised by Revenue that as an administrative measure, they provide what is known as “outline approval” to companies in advance of the shares issuing. This is where Revenue are prepared to express the opinion that, based on the information provided, relief under EII is likely to be available for an investment in a company. There is no requirement for a company to obtain outline approval prior to issuing shares. Therefore, the absence of outline approval does not prevent a company raising capital.

The company referred to by the deputy applied for outline approval on 18th August. That application is awaiting attention and will be dealt with in due course. Revenue has informed me that all correspondence in relation to EII is dealt with in date order. 

I am advised by Revenue that they are experiencing some backlog in processing requests for approval under this scheme and that there has been an increase in the volume of correspondence on the scheme. This backlog is due to an increase in the number of companies applying for certification and to the increased complexity brought to the scheme by certain necessary changes to ensure consistency with European law made in Finance Act, 2015. 

Revenue has put in place procedures to reduce the backlog and it is anticipated that the application by the company referred to will be processed within the next 6 weeks. In addition, a review of the frequently raised issues has led to a re-design of the application forms to reduce correspondence relating to each application. Furthermore, a tax manual is being drafted to more clearly explain the aspects of the scheme that are the subject of multiple queries. The updated application form will be issued shortly, and the draft explanatory manual is currently being reviewed both internally and externally to ensure that it addresses the issues identified.