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Dáil Éireann debate -
Wednesday, 26 Jan 2000

Vol. 513 No. 1

Written Answers. - Pre-Budget Submissions.

John McGuinness

Question:

370 Mr. McGuinness asked the Minister for Finance the progress, if any, in relation to the pre-budget submission made by the Irish League of Credit Unions; the steps, if any, he will take in relation to each of the points raised in the submission; and if he will make a statement on the matter. [1996/00]

The Irish League of Credit Union's pre-budget submission makes a number of proposals regarding the taxation of credit unions, including seeking the implementation of the proposals of the chairman of the working group on the taxation of credit union savings. 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 in October 1998. Early last year I made the report publicly available. The group, which comprised officials from the Department of Enterprise, Trade and Employment, the Revenue Commissioners and the Department of Finance, representatives of the Irish League of Credit Unions, the Registrar of Friendly Societies and an independent chairman, failed to agree on a set of findings. However, the chairman recommended that a certain amount of tax free savings for credit union members be allowed.

When considering how best to proceed with the demands for tax free savings, including DIRT, for credit union members, one must be sensitive to the EU dimension. I understand that a formal complaint has been made to the EU Commission regarding the tax status of credit unions in Ireland. The complaint alleges that the credit union movement in Ireland has benefited from preferential tax treatment by virtue of its exemption from corporation tax and its exemption from DIRT. The complaint asserts that this treatment of credit unions in Irish taxation law is contrary to EU law. I understand that the EU Commission is in the course of investigating this complaint. In view of these developments, I am unable to introduce any changes to the legislation in this regard at present.

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