Written answers

Thursday, 11 December 2008

8:00 pm

Photo of Ciarán LynchCiarán Lynch (Cork South Central, Labour)
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Question 60: To ask the Minister for Finance if, in view of the EU Commission's veto of tax incentives for docklands regeneration as announced in Budget 2009, he will bring forward revised proposals; and if he will make a statement on the matter. [45350/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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In my Budget speech on 14 October, I announced the introduction of a new tax incentive scheme to facilitate the removal and relocation of Seveso-listed industrial facilities which hinder the residential and commercial regeneration of Docklands in urban areas. The EU Seveso Directive seeks to protect public safety by placing land-use restrictions on new residential and commercial development near locations where potentially dangerous activities are undertaken. The Deputy will also be aware that I indicated in my speech that this scheme will be subject to clearance by the European Commission from a State Aids perspective.

Although there have been some initial discussions on this matter with the EU Commission, those discussions were undertaken by officials from Departments represented on the Cork Docklands Development Forum and raised matters relating to the work of that Body on the regeneration of the Cork docklands. In relation to the incentive announced in my Budget speech and detailed in the Finance Bill, there have not been any discussions with the EU Commission either in advance of, or after, my Budget announcement and publication in the Finance Bill of the draft legislation.

During the discussions undertaken in the context of the Cork Docklands Development Forum, the EU Commission indicated that the use of tax incentives to facilitate the remediation of sites vacated by Seveso-type industrial facilities for any future residential and commercial use will not pass the EU State Aid rules because of the 'polluter pays principle'. This ensures that an industry which creates a pollution incident (or in this case, which undertakes the land-use that has damaged a particular location) must bear the cost of remediating the property back to a pre-pollution/pre-damage, land-use basis. As a result, the remediation of lands occupied by Seveso-type industrial facilities is not covered by the incentive contained in the Finance Bill and it is not appropriate to develop any other tax-based incentives to address this matter.

It should be noted however, that any company engaged in Seveso-type industrial facilities which remediates lands occupied by those facilities during the course of developing those lands for sale is allowed deduct the costs of this remediation against their taxation in the normal manner attributable to business-related costs.

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