Vol. 481 No. 7
176 Mr. Ring asked the Minister for Finance if he will introduce a corporation tax incentive of a 10 per cent corporation tax rate applicable to hotels of grade three, four and five standard in the western region outside Galway city. [16814/97]
As a member of the European Union, the Government is constrained as regards the provision of preferential rates of tax for specific regions and tax incentives generally are required to respect EU rules governing free competition and the internal market. An extension of the 10 per cent rate of corporation tax to hotels of a particular grade in the western region outside Galway city would constitute a State aid under EU law, capable of distorting competition, and would therefore require the approval of the EU Commission. It is extremely unlikely that such approval would be given and no useful purpose would be served by approaching the Commission on the matter.
