Joan Burton (Dublin West, Labour)
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Question 187: To ask the Tánaiste and Minister for Finance if an existing hospital which is not established by the State or any State authority or agency but which provides services to public patients pursuant to an agreement with the Health Service Executive under the Health Acts would be regarded as a private hospital for the purposes of Section 64 of the Finance Act 2001 and so entitled to avail of capital allowances in new construction projects; if not, the basis for distinction between those existing hospitals and new hospitals to which that section has been or may be applied in view of the fact that it is envisaged that the HSE will enter contracts for the purchase of services from both types of hospital; and if he will make a statement on the matter. [18472/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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Capital allowances are available in respect of capital expenditure incurred on the construction or refurbishment of a private hospital which falls within the definition of a qualifying hospital set out in section 268 (2A) of the Taxes Consolidation Act 1997 which was inserted by the Finance Act 2001 provision referred to by the Deputy. The scheme of capital allowances came into effect in May 2002. Whether the expenditure is incurred on the construction of a new hospital or on the extension or refurbishment of an existing hospital is not an issue once the hospital meets the requirements set out in the definition.

To be a qualifying hospital, a private hospital must meet certain capacity requirements. It must have an operating theatre or theatres and related diagnostic and therapeutic facilities and must be able to provide a range of specified services. It must also give an undertaking to the Health Service Executive to make available at least 20% of its capacity to public patients awaiting in-patient or out-patient hospital services at a fee rate of not more than 90% of that which would be charged to private patients. Capital expenditure incurred on the construction, extension or refurbishment of a private hospital may be written off over seven years at the rate of 15% per annum for the first six years and 10% in year 7.