Ned O'Keeffe (Cork East, Fianna Fail)
Link to this: Individually | In context

Question 203: To ask the Minister for Finance if he will consider the hardship being imposed on coach operators who have to pay VAT on new school buses where such a vehicle would be exempt from VAT if it was to be used as a tour bus; and if he will consider this situation in view of the new safety regulations which have to be met now on all school buses and the additional financial expenditure being imposed on operators. [26895/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

The provision of passenger transport services, including school transport services, is exempt from VAT under the EU Sixth VAT Directive. This means that school transport providers do not charge VAT on the services they supply and cannot recover VAT on the goods and services that they purchase for use in providing that service. Essentially, only VAT registered businesses which charge VAT are able to recover VAT.

Refund orders have in the past been used in a limited way to provide refunds of VAT on certain aids and appliances for the disabled, medical equipment donated voluntarily to hospitals and certain touring coaches. These orders are focused and are designed to target particular sectors. However, it is no longer possible under EU law to introduce new schemes which would allow for VAT refunds to exempt bodies or non-taxable persons.