Revenue Incentives

Revenue Initiatives Mayo LEO

The Office of the Revenue Commissioners provides a number of supports and initiatives to assist start-up business and small and medium enterprises. Initiatives include tax incentives - tax reliefs, deductions and exemptions as well as supports and other initiatives.

The Employment Investment Incentive (EII) is a tax relief incentive scheme which has replaced the Business Expansion Scheme, which provides tax relief for investment in certain corporate trades. The maximum investment by all investors in any one company or group of companies is €10,000,000 subject to a maximum of €2,500,000 in any one twelve month period. It allows individual investors to obtain income tax relief on investments up to a maximum of €150,000 per annum in each tax year up to 2013. Relief is initially available to an individual at 30%. A further 11% tax relief will be available where it has been proven that employment levels have increased at the company at the end of the holding period (3 years) or where evidence is provided that the company used the capital raised for expenditure on research and development.

The Research and Development Tax Credit is a valuable tax-based incentive that is designed to encourage investment in R&D by companies in Ireland. A 25% tax credit for qualifying Research and Development expenditure exists for companies engaged in in-house qualifying research and development undertaken within the European Economic Area. This credit may be set against a company's Corporation Tax liability. The first €100,000 of all qualifying R&D expenditure will benefit from the full 25% R&D tax credit from 2012. This is of particular benefit to SMEs. For larger R&D expenditure, the tax credit will continue to apply only to the amount by which expenditure in 2012 exceeds that incurred in the base year 2003.

Starting in Business

  • Startup Refunds for Entrepreneurs (SURE)

If you are interested in starting your own company, you may be entitled to an income tax refund of up to 41% of the capital that you invest under SURE. Depending on the size of your investment you may be entitled to a refund of income tax paid over the six years prior to the year in which you invest.

 

The scheme provides relief from corporation tax on the trading income and certain gains of new start-up companies in the first 3 years of trading. There will be full relief on income and gains relating to the trade where total corporation tax liability in any of the first 3 accounting periods does not exceed €40,000. There will be marginal relief where the tax liability falls between €40,000 and €60,000. You can earn €320,000 tax free per year for the first 3 years. The relief available is now based on the amount of employers’ PRSI paid by an employer in respect of their employees.

Recruiting

Revenue Job Assist offers both employers and workers an incentive where people who have been 12 months on the live register (or disability allowance) are employed:

  1. The employer gets double write-off of the wages plus employers PRSI for three years – even at the minimum wage, it is worth€2,500 per year to a company and up to €8,000 per year to a sole trader
  2. The worker gets an extra tax allowance – of€3,810 plus €1,270 for each child in year 1, and two-thirds of these allowances in year 2, one-third in year 3 – for a worker on the 20% rate it is worth at least €762 in the first year or €1,524 over the three years.

The Employer Job (PRSI) Incentive Scheme is open to employers who create new and additional jobs. Under this scheme, employers do not have to pay the employers' portion of the PRSI contribution for certain employees for 18 months. To qualify for this scheme both the job created and the person employed must meet certain criteria.

The Wage Subsidy Scheme provides financial incentives to employers, outside the public sector, to employ disabled people who work more than 20 hours a week. A person on the Wage Subsidy Scheme is subject to the same conditions of employment as other employees These conditions include PRSI contributions, annual leave, tax deductions and the going rate for the job.

The SMEs Online Tool is a cross-governmental guide to help small businesses know which of the over 80 Government supports could possibly fit their business.

 

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