Government told to supply more info on stallion tax
Following a preliminary decision by the Commission last April that the tax exemption for stallion stud fees was a state aid incompatible with the common market, it requested the Government to submit full details of the scheme, including its cost to the State over the previous ten years.
The Government was told to produce the documentation within ten days.
In the decision, the commission stated it needed the information in order to determine if it would order the Government to withdraw the tax break or allow it to continue.
A spokesman at the Agriculture Commission told the Irish Examiner yesterday that the Irish Government did respond to the request but the information was insufficient to allow the commission to make a final decision on the matter.
Subsequently, the commission made a new request to the Government late last month, requesting that it provide supplemental information.
A deadline of 20 days was imposed and as of yesterday, the spokesman said, the commission was still awaiting a response.
He said a final decision on whether or not the stallion tax exemption could be considered an allowable state aid would not be made before the end of February.
The commission received a formal complaint about the stallion tax scheme in existence for 35 years in July 2003.
It concluded last year that the scheme constituted a state aid incompatible with the common market.
However, if the overall cost of the scheme does not materially distort the market, it can still be deemed allowable.
But the commission was unable to decide on this point because the Department of Finance was unable to say how much the state aid costs the taxpayer each year.
The primary reason for this is that stallion owners are not required to file tax returns in respect of their income from stallion nominations.
In its decision, the commission specifically requested the Government to supply estimates of how much tax had been foregone to the State over the previous ten years.
However, it seems the details supplied by the Government so far have not been sufficient to allow the commission arrive at a final determination on the matter.
