Brian O'Shea (Waterford, Labour)
Link to this: Individually | In context

Question 161: To ask the Minister for Finance if he has received the report of the consultants commissioned to look at a range of tax breaks and shelters available to high earners; if not, when he will receive the report; if he will introduce any legislation arising from the report; and if he will make a statement on the matter. [33046/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

As the Deputy is aware, I announced in my Budget Statement that my Department and the Office of the Revenue Commissioners are undertaking a detailed review of certain tax incentive schemes and tax exemptions in 2005. Two external consultancy firms have been examining the area-based and sectoral property tax incentive schemes. The review also involves the examination by my Department and the Revenue Commissioners of certain other tax reliefs and exemptions, especially if these may be used by high earners to reduce their tax bills. The final reports from the consultants have been received by my Department and the findings from these reports will be taken into consideration in the context of the 2006 budget and Finance Bill.

Olivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

Question 163: To ask the Minister for Finance if he has received any fresh analysis of the tax relief availed of by top earners as revealed by the Revenue study of the 400 highest earners; and if he will indicate the findings. [33151/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The Revenue Commissioners' study, Effective tax rates of the top 400 earners: Report for the tax year 2001, was published by my Department in March of this year. I am informed by the Revenue Commissioners that a study of the effective tax rates of the top 400 earners in 2002 is close to completion and will be published in the normal course.

Joe Costello (Dublin Central, Labour)
Link to this: Individually | In context

Question 164: To ask the Minister for Finance the position in regard to his contacts with the EU Commission regarding its preliminary opinion that the stallion tax exemption scheme would seem to constitute an aid that is not compatible with the Common Market; if he has received a final opinion from the Commission on this matter; when he will make a final decision on any changes to the exemption; and if he will make a statement on the matter. [33045/05]

Billy Timmins (Wicklow, Fine Gael)
Link to this: Individually | In context

Question 181: To ask the Minister for Finance the action taken over recent months on the EU's challenge to tax relief on stud fees. [33132/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 164 and 181 together.

As I have already outlined to the House, the stallion stud fee exemption was introduced in Finance Act 1969 and amended in 1985. The stallion relief was included as part of annual reports on aid granted in Ireland to the agriculture sector sent by the Department of Agriculture to the Commission in 1982 and on a number of subsequent occasions. The Commission wrote to the Irish authorities on 24 June 2003 stating a complaint had been received regarding the relief and asked that full details on the exemption be sent to the Commission in order for it to be assessed as a potential State aid.

In a subsequent letter of 6 January 2005 to the Irish authorities, the Commission indicated that it had come to a preliminary conclusion that the stallion tax exemption would seem to constitute an aid scheme that is not compatible with the Common Market. The letter set out the Commission's reasoning and, against that background, invited Ireland to submit comments within one month together with any concrete proposals regarding how the scheme in question could be brought in line with Article 87 of the EC treaty.

Officials from my Department and the Department of Agriculture and Food met officials from the Commission Directorate General for Agriculture and Rural Development on 23 February 2005.

I, along with my colleague the Minister for Agriculture and Food, met the EU Commissioner for Agriculture and Rural Development in Brussels on 12 May last on this matter. At this meeting, I outlined the background to the relief and the development of the industry in Ireland over the past 30 years setting out the importance of the horse breeding industry here in terms of its contribution to employment and economic activity particularly in rural areas. I also took the opportunity to advise the Commission that, while I fully understood the Commission's obligation to examine the relief on foot of the complaint it has received, it is necessary that the broader European and international aspects of this issue be taken into account. In particular, care should be taken not to disadvantage the Irish horse breeding industry — which is recognised as being a cornerstone of the European industry — relative to competitors from around the world.

I have reported on these discussions to my colleagues in Government and I have had further correspondence with the Commission on the matter over recent months. However, the issues involved regarding the tax exemption for stallion stud fee income are still under consideration. In the normal course, any proposals for change in tax exemptions are considered in the context of the annual budget.