Tax advisers more hopeful about EIIS
The Revenue has told tax advisers that it will try to speed up the processing of the Employment and Incentive Investment Scheme (EIIS), which has been bogged down in delays this year.
Concerns have been raised about the future of the scheme, which is a vital source of funding for the Irish business sector. It has been beset by problems this year after changes were made to EIIS in late 2015 in order to comply with European State Aid rules.
The scheme used to guarantee a 30-day approval turnaround but has been subject to delays of up to 130 days in some cases, according to senior accounting sources. In some cases, schemes that had been approved in the past have been rejected - meaning that money is being returned to investors willing to back Irish firms in exchange for tax breaks.
It is understand that Revenue has told accountants that it will bring in further resources to deal with delays. The coming weeks are a crunch time for the scheme as the pay and file tax deadline of October 31 approaches.
Investors availing of tax incentives will need certainty on the status of their EIIS commitments ahead of that date.
In recent weeks Revenue has also circulated draft guidelines on the changes made as a result of State Aid Rules. Sources said that Revenue's interpretation was "conservative". However, the top priority is to get clarity on the changes to the schemes, they said.
According to Revenue, in the period from January to May 25, 73 applicant companies were processed, of which 18 were rejected and 55 were accepted.
Last year, 261 companies were the recipients of investments and there were 1,768 investors.
There was a 46pc increase in investments made through EIIS last year, with a record €108m put into Irish firms, compared with €74.1m in 2015.
For example, Goodbody Stockbrokers raised €10m from private clients for a new SME-focused fund to invest in businesses under EIIS.
Among the individual companies that secured funds last year was the Great Northern Distillery in Dundalk, Co Louth, backed by John Teeling, which secured an additional €5m.
The scheme provides relief from income tax to individuals who invest long-term risk capital in unquoted Irish companies.
Participation in the fund had improved significantly on the back of a number of changes to the scheme to make it more attractive to investors.
In 2013, the first full year of operation of the scheme, €42.4m was invested in 190 companies. One of the reasons why investment was lower was because high-net-worth individuals were believed to be more risk averse after the crash. Shares must be invested for a minimum of four years and a limit of €150,000 applies per person.
Sunday Indo Business