Entrepreneurs’ tax relief plan still awaiting approval

Finance Minister Michael Noonan has said it remains unclear as to how long it will take to formally introduce capital gains tax relief for entrepreneurs — as proposed in last October’s budget — but added his department is continuing to seek the necessary EU approval for such a move.

Sat, 19 Apr, 2014 - 01:00

Geoff Percival

The relief measure — for entrepreneurs who re-invest the proceeds from asset disposals, made since the start of 2010 — was one of the proposals made in Budget 2014 which led to most business lobby groups hailing the Government’s latest financial plan as being the most positive one for the business community seen in years.

But, in a written response to a parliamentary question from Sinn Féin’s spokesperson on Finance, Pearse Doherty, relating to what measures from the past two budgets are still awaiting EU approval, Mr Noonan noted that the section of the last Finance Act allowing for the CGT relief issue requires a Commencement Order, which has not been made.

The minister added: “Commencement of the legislative provisions is subject to EU state aid approval. My department is liaising with the European Commission to obtain this approval. It is not clear how long this process will take. However, my department is endeavouring to obtain this approval in as timely a manner as possible.”

Mr Noonan added that his department is also in discussions with the commission regarding the proposed tax scheme for the construction, or refurbishment, of certain aviation services facilities as provided for in Finance Act 2013.

Also awaiting EU approval is the Government’s Living City Initiative. Announced in Finance Bill 2013, this pilot project aims to provide certain tax incentives to attract people to live or work in historic and culturally significant city centre houses in Dublin, Cork, Galway and Kilkenny.

Additionally, film sector tax relief moves introduced to bring further tax savings to the Exchequer, by seeing reliefs accrued by producers rather than investors is also awaiting EU state aid approval.