John Gormley
Ceist:299 Mr. Gormley asked the Minister for Finance the reason the working groups recommendations to examine the taxation of returns on credit unions members' savings were not included in the Finance Bill, 1999. [10003/99]
Written Answers. - Credit Union Taxation.
The report of the working group on the taxation of the returns of credit union savings, was presented to me last October. Earlier this year I made the report publicly available. It is clear from reading the report that this matter is a complex issue and that there are a number of issues to be considered before any decision can be taken. Not least, there is the EU dimension which must be carefully examined. The corporation tax exemption for credit unions surplus income has been questioned as a State aid in Brussels. While the EU Commission decided not to regard the exemption as a State aid, one consideration, I believe, which influenced its 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 be corporation tax exemption could change if we were to exempt dividends from income tax. This EU dimension has only recently come to the fore. I am still considering this matter and as yet have no proposals in this regard.