Report Suggests Irish Government Ready To Scrap Stallion Tax Break

by Jason Gorringe, Tax-News.com, London

05 September 2005

Reporting last week, the Irish Examiner revealed that the Republic's government is thought to have committed itself to eradicating the tax exemption for stallions in December's budget.

Earlier this year, the European Commission ruled that the tax break constitutes illegal state aid.

In addition, the Labour Party is keen to see the concessions for racehorse breeders, which it argues are unfair, ended.

Despite the fact that no official statement has been made on the matter, and the Irish authorities are still formulating a response to the EU demands that the exemption be removed, the national newspaper announced on Friday that:

"The Irish Examiner understands from informed sources in Brussels that the Department of Finance has given a commitment to the EU Agriculture Commission that it will address the issue in the Budget and will change the rules."

It continued:

"In the face of what the source described as a very strong stance adopted by the Commission, the Government has all but conceded that the controversial tax break - introduced by Charles Haughey in 1969 - is an illegal state aid. If the Commission makes a final ruling that the incentive is illegal under state aid rules, it may result in the Government being levied millions of euro in compensation. It is understood the question of possible financial redress is one of the outstanding issues yet to be resolved."

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