Request to keep stallion tax break rejected
The ITBA, which represents 800 commercial breeders, is looking at other ways the Government can support the industry when the exemption is abolished next year. A report commissioned by the breeding industry estimates the scheme was costing €3 million in lost taxes each year but that figure has been disputed.
The European Commission has instead extended its investigation of tax breaks for the horse breeding industry throughout the EU.
Agriculture Commissioner Mariann Fischer Boel insists it is a form of illegal state aid giving Ireland an unfair advantage over fellow EU member states.
Finance Minister Brian Cowan is set to abolish it in the December budget.
ITBA chairman, Dermot Cantillon, said after yesterday’s meeting they were examining other ways the Minister could support the industry.
As an alternative they would favour a 1% tax but argue the Government should simply declare the current exemption a permissible state aid as it does not distort competition.
Breeders currently pay an estimated €37m a year to the Revenue Commissioners and, according to the ITBA, the tax exemption is worth just 3m a year.
The hour-long meeting with the Commissioner yesterday was the ITBA’s last chance to get a reprieve for the current arrangement.
It says Ireland is the leading producer of thoroughbred grass horses in the world, as the incentive attracts the best horses.
Mr Cantillon said: “The sector throughout Europe will lose out if breeders move to other places like the US, Japan and Australia because of their attractive incentives.”
Chairman of the European Thoroughbred Breeders Association, Dr Franco Castlefranchi, told the Commission: “The loss of the top stallions to Ireland would also be a great loss to all European bloodstock breeders.”
Mr Cantillon said past experience shows the industry is very mobile and Ireland could lose it overnight.
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