Barry Andrews (Dún Laoghaire, Fianna Fail)
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Question 237: To ask the Minister for Finance the revenues accruing to the Exchequer from value added tax on renewable energies; the likely impact on Exchequer revenues of halving the VAT rate on renewable energies; and if he will make a statement on the matter. [12919/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that the VAT yield from renewable energy for 2005 is tentatively estimated at €10.1 million. The ESB estimates that 7.5% of electricity production is from renewable energy sources.

The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. The supply of electricity is subject to the reduced VAT rate of 13.5% under Article 28 (2)(e) of the sixth VAT directive. This allows that member states which, at 1 January 1991, applied a reduced rate to supplies of goods and services other than those specified in Annex H of the sixth VAT directive to apply a reduced rate to such supplies, provided that the rate is not lower than 12%. It would, therefore, not be possible under EU rules to halve the VAT rate on renewable energies.