The European Commission is to investigate a complaint that credit unions are being given preferential tax treatment. Credit Unions do not have to pay corporation tax on their surpluses and their members do not pay retention tax on their savings income. The action is being taken by the Irish Mortgage & Savings Association; an umbrella group for many of Ireland's largest financial institutions including Irish Life, EBS and the Irish Permanent.
The Association argues that it is unfair its members must pay Corporation Tax while Credit Unions are exempt and that only members of credit unions are not hit by Deposit Interest Retention Tax or DIRT. The Credit Unions dismiss this. They argue they do not make profits per se and so should be exempt from Corporation Tax. They also say they are seeking changes to the Finance Bill so they are DIRT compliant.
