Written answers
Tuesday, 9 May 2006
Department of Finance
Tax Code
9:00 pm
Ciarán Cuffe (Dún Laoghaire, Green Party)
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Question 202: To ask the Minister for Finance his proposals to reduce the rate of VAT on repair and maintenance work on private dwellings which are protected structures in view of the EU Council of Minister's decision to ratify the extension of the sixth VAT Directive, which allows Member States to apply reduced VAT rates to labour-intensive services such as works to existing buildings; and if he will make a statement on the matter. [17390/06]
Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that under Irish law the services in question already qualify for the reduced rate of VAT of 13.5 per cent. Paragraph (xxix) of the Sixth Schedule to the Valued-Added Tax Act 1972, as amended, accords the reduced rate of 13.5 per cent to "services consisting of the development of immovable goods and work on immovable goods including the installation of fixtures, where the value of the moveable goods (if any) provided in pursuance of an agreement in relation to such services does not exceed two-thirds of the total amount on which tax is chargeable in respect of the agreement". This two-thirds rule does not usually affect building services in which the labour element is substantial. In effect, therefore, VAT on repair and maintenance work on private dwellings, whether protected or not, is chargeable at the reduced rate of 13.5 per cent.
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