The Irish Times

ECB calls on Government to rethink charge on ATM transactio­ns

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The ECB has criticised the Irish budget move to put a charge on individual ATM transactio­ns, warning that it could affect the legal tender status of euro banknotes.

However, the Department of Finance has said it regards the decision as a “domestic taxation issue”, and said it had no plans to reconsider it, as the ECB asked it to do.

In an opinion published on its website, the ECB said the measure included in the Finance Bill – to put a tax of 12 cent on ATM transactio­ns up to a maximum of ¤2.50 a year for a single function card – makes the use of euro banknotes more expensive than electronic methods of payment, “thus putting legal tender at a disadvanta­ge” .

It said that “since the stamp duty charge is a form of taxation on the withdrawal of cash from ATMs, it could affect the legal tender status of euro banknotes”.

Banknotes

Notwithsta­nding the reasons for the change and the low level of the charges, the ECB said it was concerned it could set a precedent “for possible future taxation on the channels to access euro banknotes”. It called on the Government to reconsider the measures.

However, the Department of Finance said the issue was one of domestic taxation “over which there is national competency under EU treaties”.

As such, it said, consultati­on on the moves with the ECB was not required. National sovereignt­y over taxation was a “very important matter and one which we vigorously protect”.

The move was taken in the budget to encourage people to use cards more for payments, in line with the National Payments Plan which aims to reduce reliance on cash.

The annual charge will be limited to ¤2.50 on a single-use credit or debit card and ¤5 on a dual-use charge card.

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