The Employment and Investment Incentive Scheme (“EII Scheme”) is a tax relief incentive which provides tax relief for individuals against total income for income tax purposes. The EII Scheme offers one of the few remaining income tax reliefs and is one of the few sources of total income tax relief (which includes, for example, rental income, Approved Retirement Fund (ARF) distribution income). The Tax incentive provides for tax relief of up to 40% of the investment made in certain corporate trades. The EII allows an individual investor to obtain income tax relief on investments for shares in certain companies up to certain limits each tax year. Relief under EII is available to individual investors in unquoted micro, small and medium sized trading companies.
The relief is given as a deduction from total income of an investor. It will reduce the individual’s income tax liability but will not reduce PRSI or USC. On receipt of a valid Statement of Qualification(SOQ), an investor can claim the relief by entering the amount in the relevant box on the Form 11 or Form 12 as appropriate. For investments made directly by an individual investor in a company relief should be claimed in the year in which the investment is made.