Kevin O'Keeffe (Cork East, Fianna Fail)
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233. To ask the Minister for Finance if he will allocate additional staff to clear the backlog of applications received under the employment and investment incentive, EIIS, scheme in view of the deadline for investors; if he will extend the deadline for same to the end of January 2018; and if his attention has been drawn to the fact that applications received in July 2017 are only now being processed. [46566/17]

Kevin O'Keeffe (Cork East, Fianna Fail)
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242. To ask the Minister for Finance if additional staff will be allocated to clear the backlog of applications received under the employment and investment incentive scheme in view of the deadline for investors; if he will extend the deadline for same; and if his attention has been drawn to the fact that applications received in July 2017 are only now being processed. [46774/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 233 and 242 together.

I am aware of the current position regarding the delays in processing Employment and Investment Incentive (EII) applications. Revenue has informed me that due to an increase in both the volume of the correspondence received and complexity of the issues involved in relation to applications for relief under EII, there has been an unavoidable increase in the time taken to respond to that correspondence.

Relief for investments under EII arises at the time that shares are subscribed for, meaning that applications for relief are made to Revenue after the date on which the shares are issued. As such, the backlog of applications does not prevent investors from making investments in respect of which relief can be claimed. Revenue, as an administrative measure, provides outline approval in advance of share issues to give a level of comfort to potential investors. It is not necessary to obtain outline approval in advance of share issues.

I am further advised by Revenue that a claim for relief is made by the individual when filing their annual tax return, which this year was due on 31 October 2017 for paper filers and 16 November 2017 for ROS filers. Where individuals invest directly in a company, the claim for relief must be made in respect of the year of assessment in which the investment is made. That claim may generally be made at any time up to two years after the investment. Under the pay and file system, preliminary tax for the 2017 year of assessment is due along with any final tax liability due in respect of the 2016 year of assessment. I am advised by Revenue that, in accordance with section 959AO(4)(c), when calculating the amount of preliminary tax due based on the prior year’s tax liability relief for EII investments should not be included. Therefore, currently there is no approaching deadline for investors.

The backlog in processing ‘EII Outline’ applications is 3 months, while the backlog on actual EII claims is about 2 months. Procedures have been put in place to reduce these backlogs, and additional resources have been assigned to process the backlog.