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Ireland EIIS Tax Relief Calculator

Free Irish EIIS calculator. Employment Investment Incentive Scheme: 30% income tax relief on investment, 40% if held for 4 years.

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Income tax relief on an EIIS investment at 30% or 40%.

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State backing for startup investment

The Employment Investment Incentive Scheme was designed to channel private capital into Irish SMEs that struggle to access bank finance. In return for taking the risk of investing in an unquoted company, the investor gets a significant income tax reduction. The scheme operates similarly to the UK’s Enterprise Investment Scheme. The relief is against income tax, not capital gains tax, so it works by reducing your tax bill in the year the shares are issued rather than sheltering a future gain.

The standard relief is 30% of the amount invested. If you invest 20,000 euro, you get 6,000 euro off your income tax bill. Hold the shares for four years and the company remains qualifying throughout, and a further 10% comes off, reducing your bill by a total of 8,000 euro. That brings the effective net cost of the 20,000 euro investment down to 12,000 euro for a patient investor. These are round numbers and the actual relief depends on having sufficient income tax liability to absorb the reduction.

Worked example: 20,000 euro, 4-year hold

Invest 20,000 euro in a qualifying EIIS company and commit to holding for four years. The initial 30% relief is 6,000 euro, claimed in the year of investment. After four qualifying years the additional 10% relief is 2,000 euro, claimed in the fourth year. Total relief is 8,000 euro. Net cost of investment: 12,000 euro. If the company doubles in value and you sell for 40,000 euro in year five, the gain for CGT is 40,000 euro minus 12,000 euro (the cost less any relief), which is 28,000 euro, from which CGT at 33% applies after the annual exemption. The effective post-tax return is substantially better than a straight equity investment without relief.

Limits, risks, and compliance

Revenue requires the company to certify that it qualifies under the EIIS rules before the investor can claim relief, and that certificate is the investor’s protection. Claims are made on the annual income tax return. The annual investor limit is 500,000 euro, and the company limit varies. The greatest risk in EIIS is not the Revenue side but the commercial side: most small companies seeking EIIS finance are early-stage, the failure rate is high, and the shares are illiquid. The tax relief is genuine and valuable, but it does not replace proper due diligence on the underlying business.

Frequently asked questions

What is the EIIS and how does the tax relief work?
The Employment Investment Incentive Scheme gives income tax relief on equity investments in qualifying Irish SMEs. Investors receive relief at 30% of the amount invested in the year the shares are issued. An additional 10% relief, bringing the total to 40%, is available if the investor holds the shares for four years and the company continues to qualify throughout. The relief reduces your income tax liability, not your taxable income, and is claimed on your annual return.
What is the annual investment limit for EIIS relief?
An individual can invest up to 500,000 euro per year in qualifying EIIS companies and claim full relief at 30%, or 40% where the 4-year condition is met. Investments above 500,000 euro per year do not attract relief on the excess. The company receiving the investment also has annual limits on the amount of EIIS finance it can raise, which vary depending on the size and stage of the business.
Can I claim EIIS relief if I am only a standard-rate taxpayer?
You can claim the relief, but only to the extent you have income tax liability to reduce. EIIS gives income tax relief, not a cash refund, so if your total income tax bill before relief is less than the relief amount, the excess is lost. Higher-rate taxpayers who owe 40% on some income benefit most, because the relief reduces a liability that would otherwise be at 40%. Standard-rate taxpayers reduce a liability at 20%, which still cuts the net cost of the investment but by less.
What happens if the company fails or the shares are sold early?
If you sell the shares within four years, the additional 10% relief is clawed back by Revenue. If the company goes into liquidation with no return, the relief you already claimed stands and you may also be able to claim a capital loss for CGT purposes on the amount invested less the relief received. The risk profile of EIIS investments is high because they involve unquoted SMEs, but the combined relief and potential upside from a successful company is the intended policy trade-off.

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CGT Calculator

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