The differences between the Irish League of Credit Unions (ILCU) and the Minister for Finance, Mr McCreevy, relating to the taxation of credit union savings could be resolved before the Budget.
At a meeting yesterday, both sides agreed that the discussions held over the past number of weeks could form the basis of an agreement for new taxation arrangements for credit unions. Yesterday's meeting was the third in several weeks and followed a prolonged stand-off after Mr McCreevy sought to impose 20 per cent DIRT on credit union savings in his first budget three years ago.
ILCU favours the implementation of the majority report of the working party on the taxation of credit unions, set up by Mr McCreevy two years ago.
These proposals include 20 per cent DIRT on credit union dividends, but allow for an exemption on the first £375 of dividends.
On the next £375, 20 per cent DIRT would be imposed.
Savers earning more than £750 in dividends would be taxed at 20 per cent on the entire dividend.
Representatives of the Department of Finance and the Revenue Commissioners on the working group had opposed these recommendations.
Although the Department of Finance and the league both declined to comment on the specifics of the new taxation arrangements, an ILCU source said it was an agreement the league could bring to its members and he was confident it would be accepted.
"It's a fair and equitable arrangement. Certainly the delegation today has a set of arrangements that it thinks will be accepted by the ILCU members," the source said.
The league will be consulting its members over the coming weeks and, if the proposals are accepted, the new arrangement will form part of Mr McCreevy's Budget, the source said.
The Minister's decision to meet ILCU officials last month, the first meeting between the two sides in two years, was described by one source at the time as significant. His move to end the dispute with the league coincided with a fall in the popularity of the Government after a number of setbacks in the summer.
In a statement, the Minister said he hoped agreement could be found before the Budget.
