Vol. 542 No. 6
106 Mr. Gilmore asked the Minister for Finance the information he has received from the European Commission regarding an investigation it is carrying out regarding areas of company taxation; the particular schemes of allowances which are under investigation; and if he will make a statement on the matter. [25347/01]
On 29 May 2000, the EU Commission requested information from the Irish authorities relating to two tax provisions in the Irish tax code relating to foreign income, i.e. the tax reliefs for certain repatriated dividends, formerly section 41 of the 1988 Finance Act, now section 222 of the Taxes Consolidation Act, 1997, and for certain branch profits, formerly section 29 of the 1995 Finance Act, now section 847 of the Taxes Consolidation Act, 1997. A reply was sent on 19 July 2000 and, following a further request for more information, a second reply was sent on 20 September 2000.
The Commission examined the information supplied and decided on 11 July 2001 to initiate the procedure laid down in Article 88(2) of the EC Treaty. Under this procedure, the Commission gives notice to the member state concerned to submit its comments and if the Commission subsequently considers that the aid granted by the state is not compatible with the common market having regard to Article 87 of the treaty, it shall decide that the state concerned should abolish or alter such aid within a period of time to be determined by the Commission.
The Commission accordingly wrote to the Irish authorities on 11 July asking them to submit their comments and a detailed reply was sent to the Commission on 4 October last. It should be noted that section 86 of the Finance Act, 2001, effectively abolished the relief for dividends repatriated to an Irish parent company from its foreign subsidiaries by providing that the exemption can only apply to dividends certified by the Minister for Finance before 15 February 2001. Furthermore, section 89 of the Finance Act, 2001 provides that no company may avail of the relief for foreign branch profits unless it holds a certificate issued by the Minister for Finance before 15 February 2001.
