Employment and Investment Incentive Scheme (EIIS)

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The above scheme came in to effect in late 2011 and replaced the Business Expansion Scheme.

The scheme allows individuals to claim a tax deduction for the cost of investing in certain companies.

It’s purpose is to allow companies to avail of lower cost of funds in order to create employment and to invest in research and development.

• The maximum a company can raise under the scheme is €10 million.
• Up to €2.5 million can be raised in any year.
• The investment has to be held by the individual for a minimum of 3 years.
• The individual receives a tax credit of 30%.

 A further tax credit of 11% is available to the individual if:

•  The company increases the number of employees and their average salaries in the period of the investment.

 OR

• The company increases the research and development expenditure in the period of the investment.

 The company benefits from the relatively low cost of funds and the individual investor gets the benefits of the immediate tax credit of 30% and potentially a further 11% .

In certain circumstances, EU and government grants are available also.

Jimmy Dolan is Partner - OSK Audit.

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