Recent TAC Determination Concerning EII

Introduction

A recent decision of the Tax Appeals Commission (TAC) may have opened the door for older SMEs (in existence more than seven years) that had previously raised finance under BES, SCS, SURE or EII schemes to apply for additional funding under the Employment and Investment Incentive (EII) scheme. Traditionally, the approach adopted by the Revenue Commissioners (Revenue) is to refuse applications for additional funding, unless the applicant's original business plan that accompanied the BES, SCS, SURE or EII application, also contained analyses of profits, sales and profitability development concerning follow-on funding. 

Background

In a determination dated 27 February 2021, the TAC overturned a decision of Revenue (Decision) to refuse to grant EII relief for an investment of €150,000 in new shares issued by the Appellant (Company) on 28 April 2017. Revenue refused the application on the grounds that the Company's "original business plan" did not