Aer Lingus hit by Irish tax
Shares in Europe were generally lower in trading yesterday, with Aer Lingus falling 6.1% after the carrier confirmed it will make an exceptional provision of EUR32.5 million in its financial statements to resolve a tax dispute with the Irish government.
- Aer Lingus shares fell 6.1% after confirming a provision of EUR32.5 million to resolve a tax dispute with the Irish government.
- The Irish government insisted that rehired Aer Lingus staff should pay tax and social charges on their redundancy payments.
- Aer Lingus had previously assured staff that their tax liability would be limited.
- The airline expressed disappointment and frustration at the decision and stated that it is inappropriate to seek recovery from staff.
- Aer Lingus feared that further negotiations could result in higher costs.
- Overall, shares in Europe were generally lower in trading on the given day.
The Irish government insisted 715 Aer Lingus staff who were rehired after being made redundant should pay tax and social charges on their redundancy payments. Aer Lingus had previously assured staff their tax liability would be limited. The airline maintained "it is inappropriate to seek to recover any amount from staff" and expressed its "deep disappointment and frustration" at the decision. Aer Lingus said it feared that if it pursued further negotiations the issue could end up costing more.
Selected EAD daily share price movements (% change): 25-Feb-2011