Robert Troy (Longford-Westmeath, Fianna Fail)

I again thank the Senator for raising this issue. I acknowledge that it is very important for many people.

The position remains that the VAT directive provides that all goods and services are liable for VAT at the standard rate unless they are exempt from VAT or fall within Annex III of that directive, in respect of which member states may apply reduced rates of VAT. As sunscreen products are not included anywhere within Annex III of the VAT directive, the VAT applied to them must be at the standard rate of 23%. The only way that the VAT rate could be reduced on sunscreen products would be to reduce the standard rate of 23%. However, the estimated cost of a 1% reduction in the standard rate of VAT would be €653 million, which is high. A reduction must be applied to all products currently at that rate, so this is obviously not an option.

Unfortunately, there is no scope to change how sunscreen products are treated from a VAT perspective without a change in the EU VAT directive. Such a change would rely on a proposal from the European Commission in the first instance, followed by unanimous agreement by all member states to the change. At present, no such proposal is on the horizon.

The Senator made a valid point on the designation of sunscreen. If the designation changed from a cosmetic product to a healthcare product, would it then fall as VAT-free under the directive? We need to check that out. It may not. Even if the designation changes, I am led to believe that it must be specifically designated and negotiated on a unanimous basis across Europe. We will double-check that, as the Senator requested. I will get my officials to come back to her in that regard.