Press Release: Direct taxation: Commission requests Ireland to end discriminatory rules on tax treatment of patent royalties

By a reasoned opinion under Article 226 of the EC Treaty, the European Commission has formally requested Ireland to change its tax law provision by which patent royalties are tax exempt only if research leading to the patent was carried out in Ireland. The provision is incompatible with the freedom of establishment and the free movement of services. If there is no satisfactory reaction to the reasoned opinion within two months, the Commission may decide to refer the matter to the European Court of Justice.