The Key Employee Engagement Programme (KEEP) provisions which give effect to a new employee share option scheme have been passed into law.
KEEP is designed to help small and medium enterprises (“SMEs”) to attract and retain key personnel in a tax efficient manner and will to apply to qualifying options granted to employees during the period 1 January 2018 to 31 December 2023.
The tax advantage for the participant compared to an unapproved share option is that there is no tax charge on the date of grant or exercise of the share option. The tax charge arises only on disposal of the shares acquired on exercise of the KEEP option.
A qualifying company is a company which is incorporated in Ireland or in an EEA State and is resident in an EEA State, and carries on its business in Ireland through a branch or agency.
The company must be an unquoted trading company or a trading company listed on the Enterprise Securities Market of the Irish Stock Exchange or a similar stock exchange in a country with which Ireland has a Double Taxation Agreement.
The company must also be an "SME" which is defined as an enterprise which has less than 250 employees, has an annual turnover not exceeding €50 million and/or an annual balance sheet total not exceeding €43 million.
Certain enterprises are excluded where they carry on "excluded activities". The excluded activities are: