The European Commission has formally requested Ireland to amend provisions which impose an exit tax on companies when they cease to be tax residents in Ireland. The Commission considers such provisions to be incompatible with the freedom of establishment as provided by the Treaty and the European Economic Agreement (EEA). The request takes the form of a 'reasoned opinion'. In the absence of a satisfactory response within two months, the Commission may refer Ireland to the EU's Court of Justice.
The Commission considers that such taxation serves as a discriminatory penalty on companies wishing to transfer their place of central management abroad. The rules in question are likely to dissuade companies from exercising their right of freedom of establishment and therefore constitute a restriction to the freedom of establishment as laid down in Article 49 of the Treaty on the Functioning of the European Union and Article 31 of European Economic Agreement.
The Commission sent a letter of formal notice to the Irish Authorities in November 2009.
© European Commission
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