Stallion owners in Ireland will have to pay 12.5% tax on stud fees from 1 August 2008.
While the proposals were announced a year ago, more details were disclosed last week as part of the forthcomingFinance Bill, which will introduce the changes.
Under the Bill, owners will be allowed to write-off against their tax the purchase of a stallion over four years and this includes sires who are already standing at stud.
Although stud earnings have not been taxed since 1969, the European Commission last year called for the exemption to be abolished, saying the regime constituted state aid.
Brian Cavanagh, chief executive of Horse Racing Ireland, said: Its taken away the one advantage that Ireland had, and it will take a couple of years to see whether the industry is mature enough to stand up to it.
- This news story was first published in Horse & Hound (8 February, ’07)