NEWS FLASH – PROPOSED CHANGES TO DTI INCENTIVE PROGRAMME:

The DTI have proposed certain changes to their Enterprise Investment Programme (EIP) which was launched in July 2008. The proposed changes to the programme are seen as an extremely positive step by the DTI. The Department proposes to revise the definition of acquire with regards to both Manufacturing and Tourism applications and are wanting to relax certain of the manufacturing adjudication criteria in order to focus more on job creation. The more important proposed changes have been summarized below:

Manufacturing:

Definition of Acquire:
In terms of the manufacturing programme, applications need to be submitted to the DTI at least three months before investment assets are “acquired.”

Current definition of acquire:  When the order is placed, Place Order
Proposed Change: Take into Production

Expansion Definition:
Currently expanding entities will only qualify if they are to be increasing their existing Plant & Machinery (cost value) by at least 50% (smaller projects 35%). Expanding entities involved in the Clothing and Textile sector need to increase Plant & Machinery by 30%

Proposed change to Expansion definition will require “Large” projects to increase their existing Plant & Machinery by 35% and “Smaller” projects by 30%. Textile and Clothing sector entities will only have to increase their Plant & Machinery by 10%

Tourism:

Definition of Acquire:
In terms of the tourism programme, applications need to be submitted to the DTI at least three months before investment assets are “acquired.”

Current definition of acquire: Start of Construction Activities
Proposed Change: Take into Operation

Calculation of Rented Tourism Buildings:
Currently Year 1’s annual rental is capitalized at 20% to determine a “deemed” value of Land & Buildings. This deemed value is then limited to 20% of the cost value of Furniture & Fittings.

Proposed Change   20% FF&E limitation to be removed

WE MUST STRESS THAT THE PROPOSED CHANGES HAVE NOT YET BEEN ADOPTED BY THE DTI AND APPLICATIONS RECEIVED PRIOR TO THE RATIFICATION OF ANY OF THE ABOVE CHANGES WILL BE ADJUDICATED IN TERMS OF THE CURRENT RULES.