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‘KEEP’: Report Stage Amendments to the Finance Bill

Tuesday, November 28, 2017

The Report Stage of the Finance Bill published on 22 November 2017 outlined a number of changes to the conditions of the Key Employee Engagement Programme (“KEEP”) which was originally introduced in Budget 2018 (please see our original update here).

The following amendments have been included which substantially amend the wording of the original Finance Bill as published in October:

  • The list of professional services that are excluded from KEEP has been amended following heavy lobbying form industry associations so that companies engaged in pharmaceutical and engineering professional services can avail of KEEP;
  • The definition of a ‘qualifying company’ has been amended so that the size-related SME thresholds (e. that a company has 250 or fewer employees, an annual turnover that does not exceed €50m and a Balance Sheet that does not exceed €43m) now apply at the date of grant of the qualifying share option instead of the entire option period. This has removed the concern that an employee would be hit with a tax liability if they are granted a qualifying option under KEEP and at the time of the share disposal the company is no longer classified as an SME as now only the date of grant will be relevant;
  • There is a further change in respect of the limit of €3,000,000 for the total market value of issued but unexercised share options of a participating company. This limit is now only relevant at the date of granting a qualifying share option as opposed to throughout the whole option period;
  • A company will now also qualify for KEEP if it is incorporated or resident in an EEA state other than Ireland and carrying on business in the State through a branch or agency. This was not included in the original draft of the Finance Bill.

As the Finance Bill has now been passed by the Dáil further changes to KEEP are unlikely. Our previous general comments still apply, however it is notable that these changes – particularly the clarification that the company must only be an SME at the date of grant and not the date of exercise – have broadened the scope of companies that will be eligible and may take up the scheme.


Please contact Gavin McGuire, Eoghan Doyle or Anna Crowley for more information or any queries you may have.


The information contained in this article is based on the interpretation of the relevant tax law, tax practice and published statements of the Minister for Finance. As in all matters involving interpretation of law and practice, there can be no guarantee that the Revenue Authority or Court will necessary agree to an interpretation. In addition the changes proposed in the Budget are subject to the passing of the Finance Bill through the houses of the Oireachtas and the passing of all necessary supporting legislation. The views expressed in this document are based on the firm’s interpretation of the Minister’s statement, current law and practice and may change at any time hereafter.


Eoghan Doyle