Dáil Éireann Debate, Wednesday - 5 February 2025
283. Deputy Pearse Doherty asked the Minister for Finance the total number of both individuals and companies that made use of 541C TCA 1997, known as carried interest, for the most recent year that data is available; and the total revenue raised under this section; and if he will make a statement on the matter. [3056/25]
Amharc ar fhreagraI understand the Deputy is referring to the taxation of carried interest received by certain venture capital fund managers, as provided for in section 541C of the Taxes Consolidation Act 1997 (‘TCA 1997’).
Section 541C TCA 1997 provides that the share of profits of an investment that a venture fund manager receives for managing an investment in a venture capital fund is deemed to be an amount of chargeable gains, rather than income. These profits are known as “carried interest” and are separate from the profits made by the investors in a venture capital fund. A rate of 15 per cent applies to “carried interest” received by individuals or partnerships and a rate of 12.5 per cent applies to “carried interest” received by companies. In order to qualify for these reduced rates of tax, investments must be made on or after 1 January 2009 and held for a period of at least 3 years from the date of the initial investment. The investments must be made in private trading companies which are engaged in carrying on a business of research, development and innovation activities. “Innovation activities” mean new technological, telecommunications, scientific or business processes. Relief will be given in respect of the total investments of the qualifying venture capital fund. However, relief will only apply to relevant investments in an EEA State (including the United Kingdom).
I am advised by Revenue that the estimated cost of the treatment provided for in section 541C TCA 1997 in 2022, the latest year for which data is available, was €1.1m, reflecting 13 claims across both companies and individuals.
