Tax Tips February 2019
Finance Act 2018 – Business Tax
Start-up Capital Incentive (SCI)
The Act introduces a new tax relief for qualifying persons who invest in early stage startup ventures. The maximum amount, which a qualifying company may raise, is €500,000. The tax relief will run to the end of 2021.
Employment Investment Incentive (EII) & Start-up Relief for Entrepreneurs (SURE)
The Act aims to simplify the legislation provisions of the income tax reliefs for investment in corporate trades. The amendments have introduced a range of changes to the process of the Employment Investment Incentive (EII) and the Start-up Relief for Entrepreneurs (SURE). The most significant change being the moved away from the current application process to a system whereby companies will now self-certify that they have met the conditions. It amends the trigger points in relation to when claims can be made, tying all claims to a requirement to have spent 30% of the money on a qualifying purpose rather than the various trigger points which currently apply under existing provisions. EII and SURE reliefs will be able to run until the end of 2021.
The Act confirms the Budget Day announcement of the extension of film relief to 2024. The Act also provides for an additional tax credit for film production of 5%. The credit is available where the production of a film takes place in a designated region in Ireland. The full credit will be available up to the end of 2020, after which it will taper out.
Start-up Relief for Companies
The Act extends the corporation tax relief for qualifying startup companies, who commence their trade before the start of 2022.
Gas propelled vehicles and refueling equipment: The Act confirms the Budget Day announcement of the introduction of a capital allowances scheme for gas propelled vehicles and refuelling equipment. Business will now be able to receive 100% capital allowance in year 1 of the equipment.
Intellectual Property: The Act has updated the rules for capital allowances on Intellectual Property. The update provides additional clarity on income arising when IP is acquired prior to 11 October 2017 and when IP is acquired from 11 October 2017 onwards. The updates now require that the income received from the two different periods be treated as two separate income streams when calculating capital allowances.
Childcare Services & Fitness Centre to Employees: The Act introduces a new capital allowance scheme for equipment and buildings used by employers for the purposes of providing childcare services or a fitness center to their employees. Businesses will now be able to receive 100% capital allowance in year 1, for equipment and over seven years for buildings.