Public Consultation on Employment & Investment Incentive, SARP and Foreign Earnings Deduction Tax Schemes


The Minister for Finance, Mr. Michael Noonan, T.D., today announced the commencement of public consultation processes as part of the reviews being carried out on the following tax schemes :

  • the Employment and Investment Incentive (EII) and Seed Capital Scheme (SCS);
  • the Special Assignee Relief Programme (SARP); and
  • the Foreign Earnings Deduction (FED).

“In the recently published Medium Term Economic Strategy, the Government committed to ensure that Ireland maintains a competitive and fair taxation policy. As part of this commitment, the Government will conduct a regular programme of tax relief reviews using public consultation as appropriate and publish the results. As a result, in consultation with the Revenue Commissioners, my Department is undertaking a comprehensive review of certain tax expenditures in 2014 of which these public consultations will form a part. These reviews have also been committed to in actions 3, 4, 103 and 258 of the Action Plan for Jobs 2014.

Accordingly, public consultations on The Employment and Investment Incentive and Seed Capital Scheme, the Special Assignee Relief Programme and the Foreign Earnings Deduction are being conducted. I invite all interested parties to make submissions to my Department on any of these schemes by Friday, 9th May 2014. These submissions will be considered in the context of the review of each scheme.  I will consider the findings and recommendations on each scheme in the context of Budget 2015.”

Employment and Investment Incentive

In 2013 the Minister for Finance announced the extension of the Employment and Investment Incentive (EII) and Seed Capital Scheme (SCS) until 2020 as part of a range of measures aimed at assisting small and medium-sized trading companies access development capital, stimulating investment, inspiring entrepreneurship and supporting employment.  In addition, the EII has been removed from the high earners’ restriction for a period of three years.

The EII allows an individual investor to obtain tax relief on investments up to a maximum of €150,000 per annum in each tax year up to 2020. Relief is initially available to an individual at up to 30% and up to an additional 11% is available where it has been proven that employment levels have increased at the company at the end of the holding period of 3 years or where evidence is provided that the company used the capital raised for expenditure on research and development.

Seed Capital Scheme

The Seed Capital Scheme provides tax relief for individuals in PAYE employment (and the unemployed) to invest in their own start-up company. The tax relief is available at the marginal rate. The individual can claim tax relief against income tax paid in any of the previous six years. If an individual invests €50,000 in their own company under the scheme, then they could claim relief on that investment and receive a repayment of income tax paid, i.e. 41% of €50,000 = €20,500 provided they had paid that amount of income tax in the relevant tax year.

Special Assignee Relief Programme

In Budget 2012 the Minister for Finance introduced the Special Assignee Relief Programme (SARP) to reduce the cost to employers of assigning skilled individuals in their companies from abroad to take up positions in the Irish based operations of their employer. An exemption from income tax on 30% of salary between €75,000 and €500,000 is provided for qualifying employees that are assigned for a minimum of 1 year. The relief is available for a maximum of 5 years.


Foreign Earnings Deduction

The Foreign Earnings Deduction was introduced in Budget 2012 to assist companies seeking to expand into emerging markets. A deduction of up to €35,000 against income tax is available to individuals who travel to carry out the duties of their office or employment in certain foreign countries.


Full details on all of these schemes are available on the website of the Revenue Commissioners at

Consultation papers available here