If you invest e.g. €1,000 in either Campsited or Sproose, you will receive €400 back in the form of a tax rebate. So you are actually buying €1,000 worth of shares for €600. In other words, you can buy those shares at a 40% discount.
Example of the EIIS in action Campsited and Sproose are two campaigns that are live on the Spark Crowdfunding platform.
Each company has been approved by the Revenue Commissioners in Ireland as an EIIS qualifying company, by virtue of its trading activities.
Campsited is raising €250,000 and Sproose is raising €200,000 on the Spark Crowdfunding platform.
Should an investor decide to invest €1,000 in either campaign.
Assuming the investor pays Income Tax in Ireland, they will be immediately entitled to a refund of €300 (i.e. 30% of €1,000) from the Revenue for making this investment.
If the investor holds the shares for 4 years, they can reclaim an additional €100 (i.e. 10%) from the Revenue in that year.
What is the Net Effect of this?
Essentially, the investor is purchasing the shares at a 40% discount to the company valuation.
This is a very appealing tax benefit to investing in companies on the Spark Crowdfunding platform.
Further information on the EIIS Scheme may be found in this Guide from the Revenue Commissioners.
Contact us if you would like to learn more about the benefits of this for equity crowdfunding investors.