Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Under Article 110 of the VAT directive, member states may retain the zero rates on goods and services which were in place on and from 1 January 1991, but cannot extend the zero rate to new goods and services after that date.

As the Deputy is aware, the zero rate of VAT applies to clothing and shoes for children and that is possible under EU VAT law because the zero rate applied to those goods on and from 1 January 1991. It is not possible under EU VAT law to extend the application of the zero rate by raising the age limit of children to whom the zero rate could apply in respect of articles of clothing and footwear.

Since the mid-1980s, Irish VAT law has defined children's clothing and footwear as that not exceeding the size appropriate to children of average build and foot size of ten years of age. That includes clothing described, labelled, marked or marketed as being for children under 11 years of age. The practical application of the measure is that zero rating applies to children's clothing of sizes up to and including a 32 in. chest, a 26 in. waist or 152 cm in height; and children's footwear up to and including a size 5.5 or 38. The sizes were determined in 1984 after consultation with clothing and footwear trade interests at both manufacturing and distribution levels.

While EU VAT law prohibits any increase in the age of children's clothing to which the zero rate applies, the practical application of the current zero rate to children aged under 11 can be refined where there is evidence that the size limitations have changed since the current criteria were agreed in the 1980s. Where the industry representing children's clothing and footwear has reason to believe that the current practical size measurements no longer represent children aged under 11 years of age, it should make a submission to my Department to that effect and we will engage with the sector. Accordingly, I cannot accept the Deputy's amendment.

Effectively, it is a matter of interpretation by Revenue if the average size to which the legislation refers has changed or if children have become bigger, which I expect is the case since 1984. That is more than 30 years ago and children are definitely bigger than they were. A submission must be made to Revenue or to the Department and we can pass it on or go directly to Revenue.