Seanad debates

Thursday, 16 December 2021

Nithe i dtosach suíonna - Commencement Matters

Dental Services

10:30 am

Photo of Frank FeighanFrank Feighan (Sligo-Leitrim, Fine Gael) | Oireachtas source

I am advised by the Revenue Commissioners that a VAT exemption applies to dental services provided to a patient by clinic, a principal dentist or an associate dentist, and this has not changed. The supply of facilities to a dentist to enable him or her to carry out a dental practice, is subject to VAT, and this has always been the case. Some dental practitioners operate a fee-sharing arrangement where a principal dentist provides a premises and other facilities to other dentists in exchange for a fee, and provision of such premises and other facilities constitute a service, which has always been subject to VAT.

In summary, the exemption from VAT in respect of dental services relates only to a dental service provided to a patient. The supply of premises and other facilities to a dentist in exchange for a consideration is not, and never has been, covered by the VAT exemption. This approach is fully in line with the VAT directive, with which Irish law must comply. Exemption from VAT for certain activities in the public interest are set out in Chapter 2 of Title IX of the directive, and these provisions are transposed into Irish legislation in Part 1, Schedule 1 to the Value-Added Tax Consolidation Act 2010, where paragraph 2 (5) of Schedule 1 provides for an exemption in respect of supply of professional dental services. The legislation that transposes Article 132 of the directive, and Revenue's interpretation of the legislation, ensures that exemption from VAT to the supply of dental services is applied consistently in a manner that is not dependent on the legal form of the person supplying the service. In accordance with the directive and the current jurisprudence of the European Court of Justice, the VAT exemption applies to dental services provided by a clinic, a principal dentist, or by an associate dentist whose services are provided to a patient.

I am aware that dental practitioners are seeking that the VAT exemption on dental services for patients would also apply to the supply of premises and facilities provided by one dentist to another. Aside from the central legislative position that I have already outlined, there is also an issue of fairness in why such an approach would be inappropriate. It is quite possible for a person other than a dental practitioner to provide some or all of these services to another dentist, and in such a case the supply of the services would be chargeable to VAT in the normal way. Therefore, it would distort competition if the service were to be exempt solely on the basis that it was provided by a dental practitioner. The EU principle of fiscal neutrality ensures that where economic operators are carrying on the same or closely related activities, then those operators should not be treated differently in relation to VAT. I understand that Revenue has been clear at all times regarding the VAT treatment of dental fee-sharing arrangements, and has outlined its position in correspondence and meetings with the Irish Dental Association.

With regard to the VAT applicable to the supply of dental services in Northern Ireland from 1 January 2021, Northern Ireland is no longer part of the EU in respect of the supply of services and is therefore no longer under the remit of the VAT directive in relation to those services. The Senator has outlined an issue that is of concern with regard to the UK leaving the EU, which has created that anomaly as the Senator has rightly outlined. I also represent a Border constituency. The Senator has sought a meeting with the Minister and I will bring his concerns and those of the Irish Dental Association, back to the Minister. It is an issue that has emerged over the past year and I thank the Senator for raising this important matter.

Comments

No comments

Log in or join to post a public comment.