Ireland – Commencement Order Makes KEEP Measures in | KPMG | GLOBAL

Ireland – Commencement Order Makes KEEP Measures in Finance Act Operational

Ireland – Commencement Order Makes KEEP Measures in

This report covers the Commencement Order, now made, that gives effect to the Irish Finance Act’s Key Employee Engagement Programme (“KEEP”) measures.

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The Commencement Order1 has been made (23 January 2018) which gives effect to Ireland’s Finance Act 2017.  As a result, the Key Employee Engagement Programme (“KEEP”) measures provided for in the Finance Act are now operational.  The KEEP measures provide for a new employee share incentive scheme designed to help small and medium enterprises (“SMEs”) attract and retain key personnel

The new rules will apply to qualifying options granted to employees during the period 1 January 2018 to 31 December 2023.  

For more details on KEEP, see our earlier reports in the following issues of GMS Flash Alert: 2018-011 (17 January 2018) and 2017-163 (10 November 2017).2 

WHY THIS MATTERS

With this new incentive, a “qualifying company” within the SME sector would be allowed to provide “qualifying individuals” with “qualifying share options,” as long as certain conditions are met throughout the option-holding period.

Moreover, the incentive provides for a saving of 19 percent, based on current tax rates, in the tax payable by an employee on the gain as compared to standard share option gains.

KEEP aims to support SMEs in attracting and retaining key talent by effectively deferring the taxation of gains on employee shares until the sale of the shares.

FOOTNOTES

1  The Commencement Order has been published, and can be found on the eISB website produced by the Office of the Attorney General.

For the text of the Finance Act 2017, click here. (PDF 884 KB)

2  Also see, “Taxing Times:  Finance Bill 2017 and Current Tax Developments,” (PDF 2.29 MB) a publication of the KPMG International member firm in Ireland.

The information contained in this newsletter was submitted by the KPMG International member firm in Ireland.

© 2018 KPMG, an Irish partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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