Tuesday, 24 February 2004

Ceisteanna (148, 149)

Joe Higgins

Ceist:

241 Mr. J. Higgins asked the Minister for Finance if tax breaks given to the stud farm industry are in conflict with Article 87 of the EC treaty which prohibits aid granted by a member state or through state resources in any form which distorts or threatens to distort competition by favouring certain firms or the production of certain goods; and if he will make a statement on the matter. [5620/04]

Amharc ar fhreagra

Finian McGrath

Ceist:

242 Mr. F. McGrath asked the Minister for Finance the reason Article 87 of the EC Treaty prohibits aid (details supplied) granted by a member state, or through state resources in any form which distorts or threatens to distort competition by favouring certain firms, or the production of certain goods; the reason the EU has not prohibited the unfair tax breaks given by the Government to a stud farm (details supplied); and if he will make a statement on the matter. [5677/04]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Finance)

I propose to take Questions Nos. 241 and 242 together.

Article 87 of the EC treaty prohibits any aid granted by a member state or through state resources in any form whatsoever which distorts or threatens to distort competition by favouring certain undertakings or the production of certain goods. Aid can take a variety of forms including grants, interest relief and tax relief. The issue as to whether or not aid granted by member states in any particular case is compatible with the state aid articles of the treaty is a matter for the European Commission.

The European Commission was informed of the existence of the tax exemption for stallion stud fees in line with the applicable state aid procedures in June 1982 and on a further number of occasions since then.