Ireland is being taken to court by the European Commission over the Government’s application of a reduced VAT rate on horses and greyhounds.

The European Union's executive arm today ‘decided to refer Ireland to the EU's Court of Justice over its application of a 4.8% reduced VAT rate for supplies of horses and greyhounds,’ it said.

The guardian of the world's biggest open trading bloc reaching half a billion consumers, Brussels argues that the reduced rate ‘could cause a distortion of competition within the EU.’

The decision to go to court comes after the Government ignored a June warning.

The Commission's action was among a lengthy list of new infringement proceedings announced against various states in the 27-nation bloc.