Taxes Consolidation Act 1997 Schedule 11, paragraph 3

Approval of profit sharing scheme

Schedule 11, paragraph 3 sets out the conditions under which the Revenue Commissioners must approve a company's profit sharing scheme, including the role of trustees, the scope of group schemes, and the annual limit on the value of shares that may be appropriated to any one participant.

• A company that has established a compliant profit sharing scheme may apply to Revenue for approval; Revenue must approve the scheme if they are satisfied that the eligibility conditions in paragraph 4 are met and the scheme contains no features beyond those essential or reasonably incidental to providing employees and directors with shares.
• Where the applicant company controls other companies, the scheme may extend to some or all of them as a "group scheme"; each company to which the scheme extends is a "participating company".
• The scheme must be administered by trustees resident in the State who are required to acquire qualifying shares out of moneys paid to them by the company (or a participating company), to appropriate those shares to eligible participants, and to carry out their functions under a trust constituted under Irish law that complies with Part 5 of the Schedule.
• The total initial market value of shares appropriated to any one participant in a year of assessment must not exceed €12,700, or €38,100 where shares were previously held in an employee share ownership trust (section 515(1)(b)).