The European Commission has opened infringement proceedings against Ireland because it says the Government’s tax regime discourages Irish residents from buying bonds issued by other EU states.
At present investors here who buy Irish Government bonds, get a tax exemption on any capital gain on the bonds.
However, investors in securities issued by other EU member states are subject to capital gains tax of 33%.
The European Commission said the tax treatment “discourages” Irish residents from investing in bonds issued by other EU member states or other countries in the European Economic Area.
The Commission said the decision is part of enforcement efforts to remove barriers in the single market.
“The Commission is therefore sending a letter of formal notice to Ireland, which now has two months to respond to the concerns raised by the Commission and to address the identified shortcomings,” it added.
