Vol. 502 No. 3
295 Mr. Sargent asked the Minister for Finance the plans, if any, he has to give effect to the recommendations of the Working Group on the Taxation of Returns on Credit Union Savings that DIRT be applied at 20 per cent on the returns from all credit union shares except where a member's return is £750 or less, in such cases the first £350 only to be exempt; and if he will make a statement on the matter. [8137/99]
I am still considering this report and as of yet have no proposals to amend the law in this regard.
On Report Stage of the Finance Bill, I indicated that there are a number of issues which must be considered. Issues such as tax equity and Exchequer cost, particularly if tax breaks given to credit union savers had to be extended to savers in other financial institutions. In addition, there is also an EU dimension which must be considered in full. The corporation tax exemption for credit unions, which I renewed last year, has been questioned as a State aid in Brussels. I understand that one consideration apparently influencing the Commission in taking a benign attitude to this exemption is that the members themselves are liable to income tax on the dividends. However, this benign attitude might change if we were to exempt dividends from income tax.
The different views expressed in the working group reflect the complexity of this issue and the need to examine carefully all the implications before coming forward with firm proposals.
