Brussels slams Ireland and UK for tax discrimination

The European
has ordered the UK and Ireland to stop discriminating
against each other in the way they tax the investment income of expatriates.

Most people in Ireland pay tax on their worldwide income, but residents not
permanently based in Ireland are exempt from paying tax on foreign income so
long as it is kept offshore.

An exception, however, is applied to income from the UK, which according to
the FT has raised the
ire of the European Commission.

‘This dissuades non-domiciled and not-ordinary residents living in Ireland
from investing their money in the United Kingdom,’ the EC said.

The UK rules are similar to those in Ireland, as they exclude income sourced
from Ireland.

The EC has formally asked Dublin to amend its laws on this matter and warned
that it may pursue the case in the
ECJ if required. The
process for the UK is at an earlier stage, with the EC requesting information on
the subject.

Further reading:

ECJ sends thin cap cases back to UK courts

ECJ opens door for investment trust VAT windfall

M&S loss relief victory promises tax payouts

Related reading