Government to scrap stallion tax break

THE Government will abandon the long-standing tax exemption for stallions in December’s Budget after failing to persuade the European Commission that it is a legitimate state aid.

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.

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.