Horsebreeding: Tax exemptions on stud fees, claimed by the racehorse breeding industry as instrumental in developing the sector, will be scrapped in the middle of 2008, Minister for Finance Brian Cowen said.
Tax on profits from stud fees, paid every time a stallion impregnates a mare, have been exempted in Ireland since 1969.
The exemption, which also applies to the greyhound industry, will end on July 31st, 2008.
New tax arrangements will be introduced for both industries following further discussions with the European Commission, Mr Cowen said.
The Minister told European Agriculture Commissioner Marian Fisher Boel earlier this year that he would address the tax exemption in the Budget, after the Commission ruled in principle that the scheme amounts to illegal State aid.
Mr Cowen's decision created concern in the racehorse breeding industry that stallion owners may relocate their horses to the US and Australia to avail of incentives there.
Dermot Cantillon, the chairman of the Irish Thoroughbred Breeders' Association (ITBA), said last night that the industry was disappointed to see that the "cornerstone of its success would be removed".
Since the tax exemption was introduced, Ireland has emerged as the world's third-largest producer of racehorses.
The country produces 10,000 thoroughbred foals a year, or 40 per cent of European production, and breeding industries support more than 16,000 jobs.
Mr Cantillon said "time will tell" as to whether the industry will be damaged.
