+34
The European Commission has initiated an infringement procedure against Ireland for exempting capital gains on Irish Government bonds from tax while taxing similar gains on other EU sovereign debt at 33 percent. Brussels argues that this favorable treatment violates EU rules on the free movement of capital by discouraging Irish residents from investing in bonds from other member states or EEA countries. The exemption also covers bonds from state-owned entities such as ESB and Bord Gas. Ireland has two months to respond to the formal notice before the case may escalate to the Court of Justice of the European Union.
The European Commission has opened an “infringement procedure” against the Republic for exempting capital gains on Irish Government bonds from tax, while profits on the sale of other EU sovereign debt are taxable at a rate of 33 per cent.
Brussels says that the favourable tax treatment of Irish Government bonds is not in line with EU rules governing the free movement of capital. The Irish exemption also includes capital gains tax on bonds issued by certain State-owned entities, including ESB, Bord Gáis and DAA.
“The European Commission decided to open an infringement procedure by sending a letter of formal notice to Ireland for failing to bring its legislation on the tax treatment of capital gains arising from the disposal of government bonds in line with the rules on the free movement of capital,” the commission said. “This difference in tax treatment discourages Irish residents from investing in bonds issued or guaranteed by other EU Member States or EEA countries.
” The EEA refers to the European Economic Area, which includes non-EU states Iceland, Liechtenstein, and Norway. The Government has two months to respond to the concerns raised by the commission and to address the identified shortcomings.
“Ireland notes the Letter of Formal Notice and will review and respond as required,” a spokeswoman for the Department of Finance said. In the absence of a satisfactory response, the commission may decide to issue a reasoned opinion where it formally sets out why it considers the Republic to be in breach of EU rules and gives Ireland a further period to comply.
If the commission is not satisfied by the Government’s response to that, it can bring proceedings before the Court of Justice of the European Union. There are currently 58 EU infringement cases against Ireland, according to commission data. Denmark has the lowest number of such cases, at 38, while Spain the highest, at 124. The National Treasury Management Agency , which manages funding for the Government, currently has €137.1 billion of bonds outstanding.
The agency also plans to carry out its next bond auction on October 15 th .
European Commission Tax Exemption Irish Government Bonds Free Movement Of Capital Infringement Procedure
Ireland Latest News, Ireland Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
A Guide to European Breakdown Cover for Irish DriversPlanning to drive in Europe? Check roadside assistance, vehicle recovery, travel benefits, policy limits and covered countries before you leave Ireland.
Read more »
Manchester City Found Guilty of Financial Rule Breaches by Premier League CommissionAn independent commission has declared Manchester City guilty of breaching Premier League financial rules through sham sponsorship deals and undeclared funding from Abu Dhabi United Group, amounting to more than £900 million in inflated revenues and reduced expenses between 2009-10 and 2017-18. The league will now decide on sanctions in a separate hearing. Manchester City retains the right to appeal until 2 October.
Read more »
European Commission to put Ireland’s poor climate action record under scrutinyClimate commissioner Wopke Hoekstra says emission reduction targets must be taken very seriously
Read more »
Minecraft and Candy Crush among games targeted by consumer watchdogEuropean Commission’s Consumer Protection Cooperation Network focusing on nine online gaming companies in investigation
Read more »