The European Commission has requested Ireland to amend its legislation concerning taxation on a remittance basis. Persons resident in Ireland but not domiciled or ordinarily resident there are taxed on foreign source investment income only if such income is remitted to Ireland. However, by way of exception to this rule, UK source investment income is taxable in these circumstances, thus treating UK source investment income less favourably than income arising in other EU Member States. This makes it more difficult for UK investment providers to attract capital from persons who reside in Ireland without being domiciled or ordinarily resident there. According to the Commission, this restricts the free movement of capital in violation of the EC Treaty. If Ireland does not modify its tax rules in this respect, the Commission may refer the matter to the European Court of Justice.