Press Release: Direct Taxation: Commission requests Ireland to end discriminatory taxation of income sourced in the United Kingdom and asks the United Kingdom for information about similar rules applied in its territory

By a reasoned opinion under Article 226 of the EC Treaty, the European Commission has formally requested Ireland to amend its legislation concerning remittance base taxation. Ireland normally does not tax income received by non-domiciled persons from money invested abroad if the interest is left on the foreign bank account. The Irish legislation excludes from this rule income sourced in the UK and thus treats such income less favourably than income arising elsewhere in the EU. The Commission considers that this is contrary to the EC Treaty and to the EEA Agreement, as it restricts the free movement of capital. If Ireland does not reply satisfactorily to the reasoned opinion within two months the Commission may refer the matter to the European Court of Justice. At the same time the European Commission has decided to send a request for information in the form of a letter of formal notice to the United Kingdom about similar remittance base taxation rules, which in turn appear to discriminate against income sourced in Ireland.