SCI is a tax incentive scheme which provides tax relief for individuals investing in shares in micro companies.
It applies to shares issued after 1 January 2019 and a company can raise a maximum of €500,000 under it.
To avail of SCI, the company must
- carry on a qualifying new venture which was not previously carried on by any other person
- be less than two years old
- not be a subsidiary or under the control of another company
- not have a subsidiary that does not carry on a qualifying activity
- not have any partner or linked enterprise.
The funds raised must
- be used within 4 years of the share issue for
- the purposes of carrying out relevant trading activities, or
- where the company has not yet commenced to carry out relevant trading activities, for research, development and innovation; and
- contribute to the maintenance or creation of employment.
In order that the investor might receive the tax relief, the company must provide a statement of qualification and certain other information to the Revenue Commissioners. The income tax relief is a deduction from total income but does not reduce PRSI or USC. There are clawback provisions.