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“CHAPTER 6A
Relief for investment in innovative enterprises
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Interpretation
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600B. In this Chapter—
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‘accounting period’ shall be determined in accordance with section 27;
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‘arrangement’ includes any agreement, understanding, scheme, transaction or series of transactions (whether enforceable or not);
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‘associate’ has the same meaning in relation to a person as it has by virtue of subsection (3) of section 433 in relation to a participator;
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‘authorised officer’ means an officer of the Revenue Commissioners authorised under section 600Q(1);
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‘business plan’ has the same meaning as in section 493;
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‘certificate of going concern’ has the meaning given to it by section 600F(3);
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‘certificate of commercial innovation’ has the meaning given to it by section 600F(4);
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‘certificates of qualification’ means—
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(a) a certificate of going concern, and
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(b) a certificate of commercial innovation;
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‘control’ shall be construed in accordance with subsections (2) to (6) of section 432;
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‘date of investment’ means the date of the issue of the eligible shares;
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‘director’ shall be construed in accordance with section 433(4);
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‘EEA State’ has the same meaning as in section 489;
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‘employee’ has the same meaning as in section 983;
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‘eligible shares’ shall be construed in accordance with section 494;
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‘expansion risk finance investment’ has the same meaning as in section 493;
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‘follow-on risk finance investment’ has the same meaning as in section 493;
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‘General Block Exemption Regulation’ has the same meaning as in Part 16;
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‘innovative enterprise’ has the meaning given to it by Article 2(80) of the General Block Exemption Regulation;
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‘linked businesses’ has the same meaning as in Part 16;
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‘partner businesses’ has the same meaning as in Part 16;
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‘partnership agreement’ means any valid written agreement of the partners governed by the law of the State and subject to the exclusive jurisdiction of the courts of the State as to the affairs of a partnership and the conduct of its business as may be amended, supplemented or restated from time to time;
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‘qualifying company’ shall be construed in accordance with section 600C;
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‘qualifying investment’ section 600J; shall be construed in accordance with
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‘qualifying partnership’ section 600N; shall be construed in accordance with
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‘qualifying subsidiary’ section 600D; shall be construed in accordance with
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‘relevant trading activities’ has the same meaning as in Part 16;
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‘relief group’ means a company, its partner businesses and linked businesses, taken together, and includes any relief group of which a company is a member and any company that was, at any time, a member of a relief group with a qualifying company or its qualifying subsidiaries;
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‘SME’ has the same meaning as in Part 16;
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‘undertaking in difficulty’ has the same meaning as in the General Block Exemption Regulation;
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‘unlisted’ has the same meaning as in Part 16.
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Qualifying company
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600C. For the purposes of this Chapter, a company shall be a qualifying company if it holds certificates of qualification.
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Qualifying subsidiary
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600D. For the purposes of this Chapter, a subsidiary shall be a qualifying subsidiary where it is a company to which section 600F(2)(a)(ii) applies and satisfies the following conditions:
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(a) the subsidiary is a 51 per cent subsidiary of the qualifying company;
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(b) no other person has control of the subsidiary;
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(c) no arrangements are in existence by virtue of which the conditions specified in paragraphs (a) and (b) could cease to be satisfied.
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Qualifying investment (company perspective)
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600E.(1) An investment shall not be a qualifying investment unless it is based on a business plan.
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(2) An investment shall not be a qualifying investment if it is an expansion risk finance investment or a follow-on risk finance investment.
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(3) An investment shall not be a qualifying investment unless the qualifying company provides a copy of the certificates of qualification to the qualifying investor or qualifying partnership, as the case may be.
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Certificates of qualification
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600F. (1)(a) Subject to subsection (2), a company (in this section referred to as the ‘applicant company’) that is seeking to raise investments from qualifying investors or qualifying partnerships may apply to the Revenue Commissioners for the purpose of obtaining—
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(i) a certificate of going concern, and
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(ii) a certificate of commercial innovation.
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(b) An application under paragraph (a) shall include—
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(i) a business plan in respect of which the company is seeking investment,
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(ii) details of each of the shareholders of the company including each shareholder’s name and address and shareholdings or ownership interests, as the case may be, in linked businesses or partner businesses, and
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(iii) such other information and explanations as may be requested by the Revenue Commissioners for the purposes of making a determination as to whether the company complies with the conditions specified in subsection (2).
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(2) A company shall not make an application under subsection (1) unless the following conditions are satisfied:
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(a) the applicant company—
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(i) is incorporated in the State, another EEA State or the United Kingdom,
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(ii) is tax resident in the State, another EEA State or the United Kingdom and carries on, or intends to carry on, relevant trading activities from a fixed place of business in the State,
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(iii) holds a tax clearance certificate within the meaning of section 1095,
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(iv) is a company which—
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(I) does not control (or together with any person connected with the company does not control) another company other than a qualifying subsidiary, and
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(II) is not under the control of another company (or of another company and any person connected with that other company), unless such control is exercised by the National Asset Management Agency, or by a company referred to in section 616(1)(g),
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and no arrangements are in existence by virtue of which the applicant company would fall within clause (I) or (II) in the period of 3 years following the issue of a certificate of commercial innovation,
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(v) is a company—
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(I) which exists wholly for the purpose of carrying on relevant trading activities, or
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(II) whose business consists, or will consist, wholly of—
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(A) the holding of shares or securities of, or the making of loans to, one or more qualifying subsidiaries of the company, or
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(B) both the holding of such shares or securities or the making of such loans and the carrying on of relevant trading activities where relevant trading activities are carried on from a fixed place of business in the State,
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and where a company raises any amount through the issue of eligible shares for the purposes of raising money for relevant trading activities which are being carried on by a qualifying subsidiary or which such a qualifying subsidiary intends to carry on, the amount so raised shall be used for the purpose of acquiring eligible shares in the qualifying subsidiary and for no other purpose,
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(vi) is an innovative enterprise, and
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(vii) is a company that it is reasonable to consider intends to, and has sufficient expertise and experience to, implement the business plan;
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(b) each company that is a member of the relief group of which the applicant company is a member—
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(i) is unlisted, and no arrangements are in existence in relation to the company becoming a listed company,
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(ii) is not subject to an outstanding recovery order following a previous decision of the European Commission that declared an aid illegal and incompatible with the internal market, and
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(iii) has all of its issued shares fully paid up;
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(c) no company that is a member of the relief group of which the applicant company is a member has been registered, or where any company that is a member of the relief group was formed by way of merger no company that was party to the merger has been registered, more than 5 years prior to the date of the certificate of commercial innovation issued under this section;
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(d) the relief group of which the applicant company is a member—
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(i) is an SME, and
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(ii) is not an undertaking in difficulty.
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(3) (a) Subject to paragraphs (b) and (c), the Revenue Commissioners shall issue—
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(i) a certificate (in this Chapter referred to as a ‘certificate of going concern’) to a company where the company demonstrates to the satisfaction of the Revenue Commissioners that the relief group of which the applicant company is a member satisfies the conditions specified in subsection (2)(d), or
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(ii) a determination that the applicant company has not demonstrated to the satisfaction of the Revenue Commissioners that the relief group of which the applicant company is a member satisfies the condition specified in paragraph (i) or (ii), as the case may be, of subsection (2)(d) and the reasons for the determination.
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(b) The Revenue Commissioners may issue to the applicant company a certificate, or renewal of a certificate, of going concern, as the case may be, having taken account of any recommendations or report which Enterprise Ireland may make to the Revenue Commissioners following such consultation by them with Enterprise Ireland as they consider appropriate for those purposes (including by the provision to Enterprise Ireland of such information in relation to the application as is necessary for the purposes of such consultation).
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(c) The Revenue Commissioners shall not issue a certificate, or a renewal of a certificate, of going concern, as the case may be, if they have reason to believe that any condition specified in subparagraphs (i) to (v) of paragraph (a), or paragraphs (b) and (c) of subsection (2) is not, or, in the case of the renewal of a certificate, is no longer, satisfied by the relief group or any company that is a member of the relief group, as the case may be.
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(d) A person aggrieved by a determination issued under paragraph (a)(ii) may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination.
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(e) Where a company holds a valid certificate of commercial innovation but the certificate of going concern has expired or is about to expire, the company may apply to the Revenue Commissioners for a renewal of its certificate of going concern and the provisions of this section shall, with any necessary modifications, apply to an application for a renewal of a certificate of going concern as those provisions apply to an application for a certificate of going concern.
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(f) Subject to section 600P, a certificate of going concern shall be valid until the later of—
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(i) the day which is 3 years from the date of registration of the first so registered company that is a member of the relief group, or, if earlier, where any company that is a member of the relief group was formed by way of merger, the day which is 3 years from the date of registration of any company that was party to the merger, or
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(ii) the earlier of—
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(I) the last day of the accounting period, of the company to which the certificate was issued, in which that certificate was issued, or
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(II) where the certificate was renewed in accordance with paragraph (e), the day on which the certificate of commercial innovation referred to in that paragraph ceases to be valid.
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(4) (a) Subject to paragraphs (b) and (c), the Revenue Commissioners shall issue—
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(i) a certificate (in this Chapter referred to as a ‘certificate of commercial innovation’) to a qualifying company where the company demonstrates to the satisfaction of the Revenue Commissioners that it satisfies the conditions specified in subparagraphs (vi) and (vii) of subsection (2)(a), or
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(ii) a determination that the applicant company has not demonstrated to the satisfaction of the Revenue Commissioners that it satisfies the conditions specified in subparagraphs (vi) and (vii) of subsection (2)(a) and the reasons for the determination.
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(b) The Revenue Commissioners may issue to the applicant company a certificate of commercial innovation having taken account of any recommendations or report which Enterprise Ireland may make to the Revenue Commissioners following such consultation by them with Enterprise Ireland as they consider appropriate for those purposes (including by the provision to Enterprise Ireland of such information in relation to the application as is necessary for the purposes of such consultation).
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(c) (i) The Revenue Commissioners shall not issue a certificate of commercial innovation if they have reason to believe that any condition specified in paragraphs (a) to (d) of subsection (2) is not satisfied by the relief group of which the applicant company is a member, or any company that is a member of that relief group, as the case may be.
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(ii) Where a certificate of commercial innovation is not issued because a condition specified in subparagraph (i) or (ii), as the case may be, of subsection (2)(d), is not satisfied, then the Revenue Commissioners shall issue a determination that the applicant company has not demonstrated to the satisfaction of the Revenue Commissioners that the relief group of which the applicant company is a member satisfies the condition concerned and the reasons for the determination.
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(d) A person aggrieved by a determination issued under paragraph (a)(ii) or (c)(ii), as the case may be, may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination.
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(e) Subject to section 600P, a certificate of commercial innovation shall be valid until the first date that is the fifth anniversary of the registration of any company that is a member of the relief group of which the applicant company is a member, or, if earlier, where any company that is a member of that relief group was formed by way of merger, the date that is the first date that is the fifth anniversary of the registration of any company that was party to the merger.
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(5) Certificates of qualification shall include the following information:
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(a) the type of certificate;
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(b) the name, address and company registration number, or equivalent in the case of a company incorporated outside of the State, of the qualifying company to which the certificate was issued;
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(c) the date of issue of the certificate;
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(d) the period of validity of the certificate;
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(e) a unique, sequential certificate identification number assigned to the certificate by the Revenue Commissioners.
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(6) (a) The Revenue Commissioners shall establish and maintain a register of companies to which certificates of qualification have been issued (in this subsection referred to as the ‘register’).
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(b) The Revenue Commissioners shall publish the register on a website maintained by them or on their behalf.
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(c) The register shall contain only the information specified in subsection (5) in respect of each certificate of qualification, and the date of withdrawal in a case where certificates of qualification have been withdrawn under section 600P.
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Subscription for shares
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600G. (1) For the purposes of this Chapter, an individual subscribes for a share in a company if the individual subscribes for and is issued the share by the company—
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(a) for consideration consisting wholly of cash,
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(b) for bona fide commercial reasons and not as part of an arrangement that it is reasonable to consider the main purpose, or one of the main purposes, of such arrangement is to secure a tax advantage to any person, and
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(c) by way of a bargain at arm’s length,
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and references in this Chapter to ‘subscribes for’ shall be construed accordingly.
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(2) In this Chapter, a share subscribed for, issued to, held by, or disposed of for, an individual by a nominee shall be treated for the purposes of this Chapter as subscribed for, issued to, held by, or disposed of by, the individual where the nominee has complied with the requirements of sections 892 and 894 in respect of the share.
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(3) In this Chapter, references to an individual having subscribed for a share include the individual having subscribed for the share jointly with any other individual (and references to an individual holding a share or to a share being issued to an individual shall be construed accordingly).
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Qualifying investor
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600H. (1) For the purposes of this Chapter, a ‘qualifying investor’ is an individual who on his or her own behalf subscribes for eligible shares in a qualifying company and complies with this section.
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(2) (a) An individual shall not be a qualifying investor if at the date of investment the individual is connected, as determined in accordance with this section and section 600I, with the company.
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(b) In this Chapter, an individual shall be connected with a company if the individual or an associate of the individual—
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(i) is a partner of the company, or of any company that is a member of the relief group of which that company is a member,
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(ii) is a director or employee of the company, or of any company that is a member of the relief group of which that company is a member, or
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(iii) subject to subsection (3), has an interest in the capital of the company, or of any company that is a member of the relief group of which that company is a member.
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(3) (a) Subject to subsection (4), for the purposes of this section, an individual shall have an interest in the capital of a company that is a member of the relief group if that individual, or that individual’s associate, directly or indirectly possesses or is entitled to acquire—
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(i) any of the issued share capital,
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(ii) any of the loan capital,
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(iii) any of the voting power, or
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(iv) rights to the assets on a winding up, of any such company.
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(b) For the purposes of paragraph (a)(ii), the loan capital of a company shall be treated as including any debt incurred by the company—
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(i) for any money borrowed or capital assets acquired by the company,
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(ii) for any right to receive income created in favour of the company, or
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(iii) for consideration the value of which to the company was, at the time when the debt was incurred, substantially less than the amount of the debt (including any premium on the debt),
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but shall not include a debt incurred by the company by overdrawing an account with a person carrying on a business of banking if the debt arose in the ordinary course of that business.
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(c) (i) For the purposes of paragraph (a)(iv), an individual shall have a right to the assets on a winding up if that individual, or an associate of the individual, has rights as would, in the event of the winding up of a company or in other circumstances, entitle the individual to receive any assets of the company which would at that time be available for distribution to equity holders of the company, and for the purposes of this subsection—
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(I) the persons who are equity holders of the company, and
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(II) the percentage of the assets of the company to which the individual would be entitled,
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shall be determined in accordance with sections 413 and 415, with references in section 415 to the first company being construed as references to an equity holder and references to a winding up being construed as including references to any other circumstances in which assets of the company are available for distribution to its equity holders.
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(ii) In applying sections 413 and 415 in determining the percentage of share capital or other amount which a shareholder beneficially owns or is beneficially entitled to under subparagraph (i), no regard shall be had to the provisions of section 411(1)(c).
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(d) (i) For the purposes of this section, an individual shall have an interest in the capital of the company if the individual has control of it.
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(ii) For the purposes of this section, an individual shall be treated as having an interest in the capital of the company if the individual has, at the date of investment, control of another company which is a subsidiary of the company.
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(4) For the purposes of subsection (3), no account shall be taken of shares in a company which are held by the individual concerned, or an associate of that individual, where—
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(a) that individual or that associate, as the case may be, may be entitled to relief under section 600M on the disposal of those shares, and
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(b) that individual, or a person connected with that individual, did not, at the date of investment, control the company concerned.
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(5) For the purposes of this section an individual shall be treated as entitled to acquire anything which the individual is entitled to acquire at a future date or will at a future date be entitled to acquire, and there shall be attributed to any person any rights or powers of any other person who is an associate of that person.
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(6) For the purposes of subsection (2), an individual shall not be connected with a company by reason that an associate of the individual—
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(a) has an interest in the share capital of that company, and
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(b) is a partner of the individual solely by virtue of their both being partners in a qualifying investment fund within the meaning of section 508IA or a qualifying partnership.
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Anti-avoidance: qualifying investor
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600I. Where an individual subscribes for shares in a company with which the individual is not connected, then the individual shall nevertheless be treated as connected with it if the individual subscribes for the shares as part of any arrangement which provides for another person to subscribe for shares in another company with which the individual or any other individual who is a party to the arrangement is connected.
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Qualifying investment (investor perspective)
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600J.(1) Subject to sections 600K and 600L, for the purposes of this Chapter, an investment shall be a qualifying investment where—
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(a) an individual subscribes for eligible shares in a qualifying company, and
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(b) the investment complies with this section and section 600E.
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(2) An investment shall be a qualifying investment where—
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(a) the eligible shares held by the individual have been held for a period of at least 3 years from the date of investment,
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(b) the value of the eligible shares in a qualifying company subscribed for by the individual on the date of investment—
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(i) is not less than €20,000, or
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(ii) is not less than €10,000, and at the time of the investment—
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(I) the eligible shares held by the individual represent not less than 5 per cent of the qualifying company’s ordinary share capital, and
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(II) the eligible shares held by the individual entitle the individual to not less than 5 per cent of—
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(A) the profits available for distribution to equity holders of the qualifying company,
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(B) the voting rights of the qualifying company, and
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(C) the assets of the qualifying company available for distribution to equity holders,
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and
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(III) there exist no arrangements which could reasonably be considered to—
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(A) cause the individual’s holding of eligible shares to fall below 5 per cent, or
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(B) reduce the individual’s entitlements, referred to in clause (II) in respect of the eligible shares, below 5 per cent,
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(c) throughout the period referred to paragraph (a), the total shares, including the eligible shares, held by the individual in the qualifying company or any company that is a member of the relief group of which the qualifying company is a member—
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(i) represent not more than 49 per cent of the company’s ordinary share capital, and
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(ii) do not entitle the individual to more than 49 per cent of—
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(I) the profits available for distribution to equity holders of the company,
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(II) the voting rights of the company, and
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(III) the assets of the company available for distribution to equity holders,
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and
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(d) the investor retains a copy of certificates of qualification in respect of the qualifying company that were valid on the date of investment.
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Anti-avoidance: qualifying investment (shares)
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600K. (1) In this section, ‘distribution’ has the same meaning as in the Corporation Tax Acts.
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(2) For the purposes of this section, an amount specified or implied shall include an amount specified or implied in a foreign currency.
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(3) This section applies to shares in a company where any arrangement exists which could reasonably be considered to substantially reduce the risk that the person beneficially owning those shares—
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(a) might, at or after a time specified in or implied by that arrangement, be unable to realise directly or indirectly in money or money’s worth an amount so specified or implied, other than a distribution, in respect of those shares, or
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(b) might not receive an amount so specified or implied of distributions in respect of those shares.
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(4) The reference in this section to the person beneficially owning shares shall be deemed to be a reference to both that person and any person connected with that person.
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(5) An investment in shares to which this section applies shall not be qualifying investment for the purposes of this Chapter.
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(6) Without prejudice to the generality of subsection (3), such arrangements may include any rights associated with the shares as set out in the company’s constitution.
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Anti-avoidance: qualifying investment (investor perspective)
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600L. (1) (a) For the purposes of this Chapter, an investment shall not be a qualifying investment in respect of an individual to whom this subsection applies where at any time in the period referred to in section 600J(2)(a) the company or any of its qualifying subsidiaries—
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(i) begins to carry on a business previously carried on at any time in that period otherwise than by the company or any of its qualifying subsidiaries, or
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(ii) acquires the whole or greater part of the assets used for the purposes of a business previously so carried on.
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(b) This subsection applies to an individual where—
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(i) any person or group of persons to whom an interest amounting in the aggregate to more than a 50 per cent share in the business (as previously carried on) belonged at any time in the period referred to in section 600J(2)(a) is a person or a group of persons to whom such an interest in the business carried on by the company, or any of its subsidiaries, belongs or has at any such time belonged, or
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(ii) any person or group of persons who controls or at any such time has controlled the company is a person or a group of persons who at any such time controlled another company which previously carried on the business,
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and the individual is that person or one of those persons.
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(2) An individual shall not be entitled to relief under section 600M in respect of any shares in a company where—
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(a) the company comes to acquire all of the issued share capital of another company at any time in the period referred to in section 600J(2)(a), and
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(b) any person or group of persons who controls or has at any such time controlled the company is a person or a group of persons who at any such time controlled that other company,
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and the individual is that person or one of those persons.
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(3) For the purposes of subsection (1)(b)—
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(a) the person or persons to whom a business belongs, and, where a business belongs to 2 or more persons, their respective shares in that business, shall be determined in accordance with paragraphs (a) and (b) of subsection (1) and subsections (2) and (3) of section 400, and
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(b) any interest, rights or powers of a person who is an associate of another person shall be treated as those of that other person.
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Relief
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600M. (1) (a) Subject to paragraph (b), a qualifying investor who disposes of a qualifying investment in a qualifying company shall be entitled to claim relief under this section.
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(b) This section shall not apply to a disposal that constitutes—
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(i) the redemption, repayment or repurchase of shares by a company, or
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(ii) a disposal within the meaning of section 534(b).
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(2) The amount of the chargeable gain to which this section applies is the lowest of—
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(a) the chargeable gain,
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(b) twice the amount of the qualifying investment in the eligible shares disposed of, and
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(c) an amount calculated under subsection (4)(a).
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(3) Notwithstanding section 28, where an individual makes a claim under this section, the rate of capital gains tax chargeable on the amount of the chargeable gain to which this section applies shall be the rate specified in section 28 minus 17 per cent.
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(4) (a) The amount calculated under this paragraph is the amount calculated by the following formula:
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€3,000,000 – G
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where ‘G’ is the total amount of the chargeable gains in respect of which a claim or claims were made under this section.
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(b) Where, in the return made under Part 41A in respect of a year, an individual is making a claim under this section in respect of more than one disposal of eligible shares, the amount calculated under paragraph (a) shall be calculated in respect of the earlier disposals in advance of the later disposals, and the amount calculated in respect of those earlier disposals shall be included in ‘G’ in the formula in paragraph (a) in respect of those later disposals.
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(5) In making a claim under this section, an individual shall, in the return required to be made under Part 41A in respect of the year in which the disposal was made, provide the following information:
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(a) the name and address of the qualifying company that issued the shares;
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(b) the date on which the investment was made;
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(c) the value and number of shares subscribed for as part of the qualifying investment;
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(d) the unique, sequential certificate identification number of the certificate of commercial innovation assigned by the Revenue Commissioners.
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Qualifying partnership
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600N. (1) For the purposes of this Chapter, a ‘qualifying partnership’ is a partnership—
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(a) in which an individual is a partner and has contributed a minimum of €20,000 to the partnership prior to the date of investment by the partnership in a qualifying company, and
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(b) that complies with subsection (2).
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(2) A partnership shall be a qualifying partnership for the purposes of this Chapter if—
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(a) it is established under a partnership agreement and has as its principal business, to be expressed in the partnership agreement establishing the qualifying partnership, the investment of its funds in accordance with a defined investment policy for the benefit of its investors, and
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(b) under the terms of the partnership agreement it is provided that—
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(i) the funds to be invested in eligible shares are to be invested without undue delay,
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(ii) pending investment in eligible shares, any moneys subscribed for the purchase of shares are to be placed on deposit in a separate account with a bank licensed to transact business in the State,
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(iii) any amounts received by means of dividends or interest are, subject to a commission in respect of management expenses at a rate not exceeding a rate which shall be specified in the partnership agreement, to be paid without undue delay to the partners,
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(iv) any charges to be made by means of management or other expenses in connection with the establishment, running, winding down or termination of the partnership shall be at a rate not exceeding a rate which shall be specified in the partnership agreement, and
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(v) audited accounts of the partnership are prepared annually and submitted to the Revenue Commissioners when requested.
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(3) (a) Where a qualifying partnership makes an investment of at least €20,000 in eligible shares in a qualifying company that would be, if it were made directly by an individual, a qualifying investment subject to the modifications set out in paragraph (b), then, section 600M shall apply to the disposal of those eligible shares apportionable to a partner referred to in subsection (1)(a) subject to the modifications set out in subsection (4).
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(b) The modifications set out in this paragraph are that section 600J applies to an investment by a qualifying partnership as if—
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(i) subparagraph (ii) of subsection (2)(b) of that section were deleted, and
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(ii) references to ‘the individual’ in paragraph (c) of subsection (2) of that section were references to ‘the qualifying partnership’.
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(4) In applying section 600M to the disposal of an investment in eligible shares which was made by an individual through a qualifying partnership, subsection (3) of that section shall apply as if references to ‘17 per cent’ were references to ‘15 per cent’.
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Interaction of relief with other provisions of this Act
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600O. (1) (a) Section 597AA shall apply to a disposal, in whole or in part, of eligible shares subscribed for by, and issued to, a qualifying investor where the amount of capital gains tax payable in respect of the disposal under this Chapter is greater than the amount of capital gains tax that would be payable in respect of the disposal were section 597AA to apply.
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(b) Section 600M shall not apply to a disposal referred to in paragraph (a) to which section 597AA applies.
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(2) (a) Section 598 or 599, as the case may be, shall apply to a disposal, in whole or in part, of eligible shares subscribed for by, and issued to, a qualifying investor where the amount of capital gains tax payable in respect of the disposal under this Chapter is greater than the amount of capital gains tax that would be payable in respect of the disposal were section 598 or 599, as the case may be, to apply.
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(b) Section 600M shall not apply to a disposal referred to in paragraph (a) to which section 598 or 599, as the case may be, applies.
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(3) Section 600M shall not apply to a disposal, in whole or in part, of the eligible shares subscribed for by, and issued to, a qualifying investor where that individual has made, or intends to make, a claim for relief within the meaning of Part 16 in respect of those eligible shares.
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Failure to comply with requirements of this Chapter
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600P. (1) This subsection applies to a company (in this subsection referred to as ‘the first-mentioned company’) to which certificates of qualification were issued which are valid and—
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(a) the first-mentioned company does not satisfy the conditions specified in subsection (2)(a) of section 600F,
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(b) any company that is a member of the relief group of which the first-mentioned company is a member does not satisfy the conditions specified in paragraphs (b) and (c) of subsection (2) of section 600F, or
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(c) the relief group of which the first-mentioned company is a member does not satisfy the conditions specified in subsection (2)(d) of section 600F.
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(2) (a) A company to which subsection (1) applies—
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(i) shall not provide copies of its certificates of qualification to a qualifying investor or a qualifying partnership, as the case may be, and
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(ii) shall return its certificates of qualification to the Revenue Commissioners.
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(b) Where a company returns its certificates of qualification under paragraph (a), the Revenue Commissioners shall withdraw the certificates.
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(c) Where the Revenue Commissioners withdraw the certificates of qualification under paragraph (b) they shall cease to be valid from the date of withdrawal.
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(3) (a) This subsection applies to an investment and a company where the company, contrary to subsection (2)(a)(i), provided a copy of the certificates of qualification to the qualifying investor or qualifying partnership, as the case may be, who made the investment in the company.
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(b) A company to which this subsection applies shall, in the year in which the certificates of qualification were provided to the qualifying investor or qualifying partnership, as the case may be, be charged to corporation tax under Case IV of Schedule D for the accounting period in which the investment to which this subsection applies was made in an amount calculated by the following formula:
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(I X 2 X 17 per cent) X 4
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where I is the investment to which this subsection applies.
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(c) An amount chargeable to tax under this section shall be treated—
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(i) as income against which no loss, deficit, expense or allowance may be set off, and
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(ii) as not forming part of the income of the company for the purposes of calculating a surcharge under section 440.
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(4) (a) Where, during the period of validity of the certificates of qualification issued to a company, there is a change in the material facts relevant to the satisfaction of the conditions specified in section 600F(2)—
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(i) the company, or
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(ii) any officer or agent of the company who has knowledge of the change,
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shall, within 30 days of the change or, in the case of an officer or agent of the company falling within subparagraph (ii) within 30 days of coming to know of the change, bring that change to the attention of the Revenue Commissioners.
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(b) (i) An individual who does not comply with paragraph (a) shall be liable to a penalty of €3,000.
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(ii) Where a company does not comply with paragraph (a)—
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(I) the company shall be liable to a penalty of €4,000, and
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(II) the secretary of the company shall be liable to a separate penalty of €3,000.
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(c) Where information comes to the attention of the Revenue Commissioners which causes the Revenue Commissioners to form the opinion that—
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(i) there has been a change in a material fact relevant to the satisfaction of any of the conditions specified in section 600F(2), or
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(ii) any of the conditions specified in section 600F(2) were not satisfied at the date of application under section 600F(1) or the date on which the certificates of qualification were issued or renewed, as the case may be,
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then, the Revenue Commissioners shall give notice in writing to the company that they intend to withdraw the certificates of qualification.
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(d) For the purposes of paragraph (c), the Revenue Commissioners shall take into account any recommendations or report which Enterprise Ireland may make to the Revenue Commissioners following such consultation by them with Enterprise Ireland as they consider appropriate for this purpose (including by the provision to Enterprise Ireland of such information in relation to the matter as is necessary for the purposes of such consultation).
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(e) A notice under paragraph (c) shall state—
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(i) the reasons for the intention to withdraw the certificates of qualification, and
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(ii) that the company has a period of 30 days to make submissions and to provide such information and explanations as are necessary to prove to the satisfaction of the Revenue Commissioners that the conditions specified in section 600F(2)—
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(I) continue to be satisfied, in a case where paragraph (c)(i) applies, or
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(II) were satisfied, in a case where paragraph (c)(ii) applies.
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(f) Where, following consideration of any submissions and such additional information or explanations as may be provided by the company pursuant to a notice under paragraph (c), and taking into account any recommendations or report which Enterprise Ireland may make to the Revenue Commissioners following such consultation by them with Enterprise Ireland as they consider appropriate for this purpose (including by the provision to Enterprise Ireland of such information in relation to the matter as is necessary for the purposes of such consultation), the opinion of the Revenue Commissioners remains that the conditions in section 600F(2)—
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(i) are not satisfied, in a case where paragraph (c)(i) applies, or
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(ii) were not satisfied, in a case where paragraph (c)(ii) applies,
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then, the Revenue Commissioners shall issue a determination to that effect and that the certificates of qualification are withdrawn and the reasons for the determination.
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(g) A person aggrieved by a determination issued under paragraph (f) may appeal the determination to the Appeal Commissioners, in accordance with section 949I, within the period of 30 days after the date of the notice of that determination.
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(h) A determination under paragraph (f) shall take effect and the certificates of qualification so withdrawn shall cease to be valid—
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(i) where no appeal against the determination is brought under paragraph (g), on the expiration of the period specified in paragraph (g) for bringing an appeal, or
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(ii) where an appeal if brought under paragraph (g), on the date on which the determination is confirmed on appeal or the appeal is withdrawn, abandoned or otherwise not proceeded with, as the case may be.
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Powers
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600Q. (1) The Revenue Commissioners may nominate in writing any of their officers to perform any acts and discharge any functions authorised by this Chapter to be performed or discharged by the Revenue Commissioners.
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(2) An authorised officer may make such enquiries as the authorised officer considers necessary for the purpose of being satisfied as to whether—
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(a) information included in an application made by a company in accordance with section 600F(1) was correct and complete, and
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(b) a company has complied with section 600P(2).
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(3) An authorised officer may, at all reasonable times, enter any premises or place of business of a company for the purpose of carrying out the enquiries referred to in subsection (2).
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(4) An authorised officer may, in respect of an applicant company, require a linked business or a partner business to produce books, records or other documents and to furnish information, explanations and particulars and to give all assistance which the authorised officer may reasonably require for the purposes of his or her enquiries.
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Application of this Chapter
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600R. Section 600M shall apply only in respect of the disposal of eligible shares that are issued on or before 31 December 2026.”,
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and
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(b) in section 851A—
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(i) in subsection (8)—
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(I) in paragraph (n), by the deletion of “and” after “functioning of the European Union,”,
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(II) in paragraph (o), by the substitution of “European Union, and” for “European Union.”, and
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(III) by the insertion of the following paragraph after paragraph (o):
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“(p) where the taxpayer information is disclosed to Enterprise Ireland for the sole purpose of the consultation referred to in subsection (3)(b) or (4)(b), as the case may be, of section 600F.”,
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and
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(ii) by the insertion of the following subsection after subsection (8B):
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“(8C) In relation to the disclosure of information referred to in paragraph (p) of subsection (8), Enterprise Ireland shall notify the Revenue Commissioners in writing of its intention to engage a person for either or both of the purposes referred to in that paragraph and shall not engage the person if, within the period of 30 days from the date of the notification, the Revenue Commissioners have objected to the engagement of that person.”.
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(2) Subsection (1) shall come into operation on such day as the Minister for Finance may appoint by order.
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Amendment of section 536 of Principal Act (capital sums: receipt of compensation and insurance moneys not treated as a disposal in certain cases)
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47. (1) Section 536 of the Principal Act is amended by the insertion of the following subsection after subsection (4):
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“(5) This section shall not apply to a disposal or deemed disposal of, or of an interest in, property situate in the State to an authority possessing compulsory purchase powers, where the disposal or deemed disposal, as the case may be, would not have been made but for—
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(a) the exercise of those powers, or
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(b) the giving by the authority of formal notice of its intention to exercise those powers.”.
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(2) Subsection (1) applies to disposals and deemed disposals referred to in that subsection made on or after the date of the passing of this Act.
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