The European Commission has ruled as illegal state aid the Foreign Income Scheme, which exempts the profits of foreign branches of Irish firms from Irish tax, if the money is invested to create jobs in Ireland. Only one firm has taken advantage of the scheme since it was introduced in 1995 and the Government stopped accepting applications for it in 2001.

The Commission concluded that the firm that benefited from the scheme may have been unaware that it conflicted with EU rules on state aid. As a result, the firm will not be obliged to repay any money it may have saved as a result. The Department of Finance has declined to identify the company involved but said the sum of money saved was very small.