Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

My apologies to the House for keeping Members waiting. I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. The VAT directive obliges each member state to have a standard rate of VAT and allows that a member state may choose to have no more than two reduced rates of VAT which may be applied to certain goods and services.  In addition, within this rates structure the directive allows for historic VAT treatment to be maintained under certain conditions on certain goods and services.  Under this framework, Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%.  Ireland has also retained its historic application of one of the reduced rates of VAT, 13.5%, to a range of services, including the supply of fuel, gas, oil and electricity services, and, under the directive, the rate applicable to such services cannot be reduced below 12%. There is no provision in the directive that would allow a VAT exemption or a VAT rebate in respect of domestic energy supplies.

The Government recognises the impact the increase in energy costs is having on households. In budget 2022, a targeted package of social protection interventions was provided for through both the redistribution of carbon tax receipts and direct Exchequer funding.

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