Brian Cowen (Laois-Offaly, Fianna Fail)

It is the view of the Revenue Commissioners that it is only in the event of a complaint arising in respect of capital gains tax that it will deal with the matter on its merits. We are dealing with the requirement covering income tax, as set out in the court opinion. This change is as a result of a reasoned opinion and infringement notice from the European Commission in respect of income tax payable on UK-sourced income. The Commission stated in particular that:

Ireland has failed to fulfil its obligations under Articles 56 EC and Article 40 EEA by adopting and maintaining legislation which taxes the income on capital invested in the United Kingdom by persons who are not domiciled in Ireland, or being a citizen of Ireland, are not ordinarily resident in Ireland, while exempting such person's income from capital invested in other member States or in the EFTA/EEA States.

The Commission invited Ireland to take the necessary measures to comply with its opinion. The position was reviewed with the Revenue Commissioners and further legal advice was received from the Attorney General. Section 18 is a response to the Commission's invitation and it ensures that we are now in compliance with the Commission's opinion on the matter.

The proposed amendment would make a change to section 73 of the Taxes Consolidation Act 1997, as amended. Section 73 is concerned only with income arising in the United Kingdom and the amendment will therefore have no effect on capital gains tax.

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