EU stallion tax query delay

THE Department of Finance admitted last night that the European Commission sought further clarification on the stallion tax exemption earlier this month, despite Finance Minister Brian Cowen telling the Dáil yesterday that there had been no communication from the EU since last summer.

A spokesman for Finance confirmed to the Irish Examiner that the Commission had indeed written to the department on January 6 of this year.

However, because of an “administrative error” the department only learned of the letter late yesterday afternoon, after queries were raised by the Irish Examiner.

This newspaper reported on January 12 that the Agriculture Commission had written to the department around the new year because the information supplied by the department was “insufficient” to enable the commission make a final decision on whether the tax exemption constituted an allowable State aid or not.

The Finance spokesman said Mr Cowen had not misled the Dáil yesterday because the department had been unaware until late yesterday afternoon that the commission had written to it in January.

The letter was routed through the Government’s permanent representative office in Dublin but, as of last night, Finance was not able to establish the exact reason why it had not been received by the department until yesterday afternoon.

Mr Cowen said there had been no communication since last July when responding to a priority question on stallion tax raised by Labour’s finance spokesperson Joan Burton.

He insisted that the commission had made no final determination on the stallion tax last April, and had merely requested information from Finance about the provision.

Later, he said: “The commission contacted us last in April 2004 and we answered in July 2004. We have not heard from the commission since.

“The idea that the matter is exercising everyone’s mind on a weekly basis and that some mystery attaches to it is unfounded.”

The department again maintained last night that the commission decision of last April was not a final decision or determination but simply a decision to enjoin Ireland to provide all information.

Nonetheless, in the decision, the commission said that the tax exemption fulfilled all four criteria for a State aid that must be notified.

The commission also criticised the Government for failing to notify it of the tax exemption.

Mr Cowen maintained yesterday that the commission was aware of the exemption since 1982.