Vol. 509 No. 1
182 Mr. Noonan asked the Minister for Finance if he will meet with the Irish League of Credit Unions to discuss the implementation of the recommendations made by the working committee which he put in place to examine and report on a sustainable fair and equitable tax procedure for credit union members; and if he will make a statement on the matter. [19947/99]
The report of the independent working group which I established to examine the issue of the taxation of credit union savings, was presented to me last October. Earlier this year I made the report publicly available. The chairman of this group, supported by the Irish League of Credit Unions (ILCU), recommended that a certain amount of tax free savings for credit union members be allowed. However, this was not the unanimous finding of the group.
When considering how best to proceed with the demands for tax free savings, including DIRT, for credit union members, a point that must be borne in mind is the fact that there is an EU dimension which must be carefully examined. While the EU Commission decided not to regard the corporation tax exemption enjoyed by credit unions as a State aid, one consideration, I believe, which influenced their decision is the fact that the dividends paid out of such income are liable to income tax in the hands of the credit union members themselves. This benign attitude of the Commission to the corporation tax exemption could change if we were to exempt dividends from income tax. This is a point which should not be overlooked by those now seeking an exemption of credit union dividends from income tax.
I am fully conversant with the views of the league as they were contained in the report of the working group. Consequently, at this stage, I have no plans to meet with the ILCU in this regard.
