Ciarán Cuffe (Dún Laoghaire, Green Party)
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Question 173: To ask the Minister for Finance the reason VAT is charged on the public service obligation for energy providers; and if he will make a statement on the matter. [13608/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that the application of VAT to goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. The method through which VAT must be calculated has been transposed from the VAT Directive by section 10 of the Value Added Tax Act 1972 as follows;

"...the total consideration which the person supplying goods or services becomes entitled to receive in respect of or in relation to such supply of goods or services, including all taxes, commissions, costs and charges whatsoever, but not including value-added tax chargeable in respect of the supply".

Any standing charges included in utility bills are therefore legally subject to VAT.