Members of the Irish thoroughbred industry have met the European Agriculture Commissioner Mariann Fischer Boel amid signs that the lucrative tax exemption for stud fees in Ireland is to be scrapped.
Fees earned in Ireland for covers of mares by stallions are on average €8,000 and are tax exempt.
Successful siring of foals can command several times that, revenue which is also tax free. As such the Irish bloodstock industry is one of the world's most successful, producing 10,000 foals a year.
However, following a complaint in January the European Commission wrote to the Government suggesting the exemption broke EU rules on state aid, distorting competition.
After today's meeting in Brussels the Irish Thoroughbred Breeders Association (ITBA) denied the scheme distorted competition across Europe and claimed this was backed up by the European breeders association.
They said the loss of the tax exemption would see the industry move out of Ireland if the incentive for investors was withdrawn.
The Commission insists that the exemption is against state aid rules and says a formal investigation is underway.
It's believed the government's response will not be made until budget day on December 7.
