Changes to the Employment and Investment Incentive to remove connected individuals

Nov 06, 2017

Individuals connected with a company through the ownership of share capital, loan capital or voting rights of that company are now excluded from the Employment and Investment Incentive (EII) according to a statement from the Minister for Finance.  The incentive was amended with effect from 2 November 2017 by a Committee Stage amendment to Finance Bill 2017.

The statement from the Minister tells us that the change to the EII effected by a Committee Stage amendment to Finance Bill 2017, was needed as the incentive did not comply with the EU Regulations.    The Regulations known as the European Commission General Block Exemption Regulations (GBER) require that schemes like the EII should not provide relief to persons with close connections to the company.   The incentive is provided for by section 492 of the Taxes Consolidation Act 1997

 According to the statement, “the EII will continue to be available to first time investors and investors who have already made an EII investment”. 

A Revenue eBrief on the matter tells us that all shares issued under the EII prior to 2 November will continue to be processed by Revenue under the current rules.  

The Committee Stage amendments to Finance Bill 2017 were published this morning on the Oireachtas website.  Amendment number 18 provides for the changes to the EII.