Richard Bruton (Dublin North Central, Fine Gael)
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Question 228: To ask the Minister for Finance the terms of the Revenue Commissioners ruling on the application of VAT to the collection and disposal of waste; the annual revenue collected in VAT on these activities and the extra revenue anticipated in view of this ruling; and the impact it will have on privatised collection and disposal services compared with those operated by local authorities. [36952/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that earlier this year they became aware that VAT was being applied inconsistently in the private waste management sector. Indeed, compliant members of the trade wanted the Revenue Commissioners to ensure consistency of treatment across the industry. There was a lack of clarity on the part of some private operators about the application of VAT to waste disposal. The legal position regarding the VAT treatment is clear. In the case of privately operated landfill facilities, VAT is chargeable at 13.5% on the total consideration that the operator is entitled to receive, inclusive of the landfill levy.

In June 2005, the Revenue Commissioners issued instructions to their staff confirming the legal position on the application of VAT in the private waste management sector and the necessity for consistency of treatment across the sector. The commissioners subsequently published an article in their tax briefing publication, which explained the correct VAT treatment. Revenue officials also recently met representatives from the Irish Waste Management Association to confirm the correct VAT treatment.

In so far as the application of VAT to local authorities engaged in the collection and disposal of waste is concerned, the legal position is that such authorities are exempt from VAT. This means that they do not charge VAT on the services they provide, nor can they claim VAT back on any of the inputs that go towards providing a service. Essentially, only VAT registered businesses which charge VAT are able to recover VAT.

Finally, regarding the annual yield from VAT in the area of private sector waste management, I am informed by the Revenue Commissioners that statistics are not available which would enable the information requested by the Deputy to be provided. Waste collection and disposal services are classified within the same economic sector as a wide range of other services and can not be separately identified.

There is nothing I can do in this matter as EU rules dictate how VAT should be levied.