Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

109. To ask the Minister for Finance the estimated annual cost of removing the 30% share ownership restriction for the EIIS; and if he will make a statement on the matter. [28616/18]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

110. To ask the Minister for Finance the estimated annual cost of increasing the annual cap for the EIIS from €150,000 to €1 million; and if he will make a statement on the matter. [28617/18]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I propose to take Questions Nos. 109 and 110 together.

As the Deputy will be aware, I made significant changes to the operation of the Employment and Investment Incentive (EII) in Finance Bill 2017 in order to ensure that the incentive accords with Art 21(3) of the European Commission General Block Exemption Regulations (GBER). GBER requires that risk finance aid schemes such as the EII should be restricted to independent private investors and should not provide relief to persons with close connections to the undertaking.

The changes provided for in Finance Bill 2017 came into effect on 2 November 2017 and allow that only independent private investors, within the meaning of GBER, are eligible for relief under EII. Prior to these changes being made, Part 16 of the Taxes Consolidation Act allowed connected persons up to 30% shareholding (or options) in the enterprise to avail of the incentive.

On the basis that the change will result in fewer eligible applicants, with the saving to the Exchequer estimated at between €6 million and €10 million (based on 2016 data). This represents the latest available estimate of the effect of the change.

I am advised by Revenue that based on investments made under the EII for each tax years from 2012 to 2016, the estimated annual cost of increasing the annual cap for the EIIS from €150,000 to €1 million would have been as set out in the table below. The figures do not include investments made through funds and assume the maximum relief available to all investors.