Employment and Investment Incentive Scheme (EII)
EII is the income tax relief scheme which commenced on the 25th November 2011. The EII is a direct replacement for the Business Expansion Scheme which has been a popular investment for Irish tax payers over the past 20 years. BVP are the investment manager for the BVP Green BES and EII Funds. EII Funds are designated by the Department of Jobs, Enterprise and Innovation and the Revenue Commissioners to invest in EII qualifying companies. The scheme was established to encourage investment in private businesses in Ireland, primarily in the small to medium sized enterprise (SME) sector.
What Tax Relief is Available?
The tax relief enables investors to deduct 30/40ths of the cost of their qualifying investment from their total income for income tax purposes (including rental income) in the year the investment is made.
On completion of the three year holding period, a further deduction of 10/40ths of the cost of the qualifying investment is allowable from their total income subject to the investee companies increasing employment levels or increasing R&D expenditure.
Who can invest in an EII Fund?
Any individual can invest in an EII Fund from as little as €250 up to €150,000 in any one tax year. The High Earners restriction does not apply to EII investments.
Why invest in an EII Fund?
Our investors participate in equity investments with anticipated returns of 15% growth per annum (including tax relief). Investing can give immediate tax relief for all professionals, business owners and employees in the year of investment.
By making an investment of €20,000 in 2016 you will get income tax relief of up to €8,000 over the lifetime of your investment.
You can find further information about the EII scheme on the Revenue Commissioner’s website.
Note: The information above is based on BVP’s current understanding of the EII legislation. Potential investors should seek professional advice from their tax adviser, accountant or financial broker.
The marginal tax rate at which the investor will be granted tax relief is determined by their personal circumstances and the marginal rate of tax in force for the year in which the investor claims the EII tax relief (both first and second tranches).
You should consult your accountant, tax advisor or financial broker to discuss the implications of this further.