Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 134: To ask the Tánaiste and Minister for Finance the way he will enhance the business expansion and seed capital schemes; and if he will make a statement on the matter. [18985/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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As the Deputy will be aware, an extensive review of the Business Expansion Scheme (BES) and the associated Seed Capital Scheme (SCS) was carried out by my Department, in conjunction with the Revenue Commissioners and the Department of Enterprise, Trade and Employment last year. This review took account of various studies, including the Report of the Small Business Forum. Following this review I announced in Budget 2007 that the schemes were to be extended for a seven year period from 1 January 2007 to 31 December 2013. I also increased the aggregate amount that a company can raise under the schemes from €1 million to €2 million. The individual investment limits were increased from €31,750 to €150,000 in the case of the BES and from €31,750 to €100,000 in the case of the SCS. Recycling companies were added to the list of qualifying trades and a number of other amendments, aimed at improving the operation of the schemes, were made. As the schemes are considered to be State-aids, these changes required that an application be made to the European Commission for approval. The approval was received in August this year and I signed a Commencement Order giving effect to the changes in September.

I have no plans to make further amendments to the schemes at this time. However, as with all tax reliefs, the BES and SCS are kept under ongoing review in order to ensure that they meet their objectives.

Jack Wall (Kildare South, Labour)
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Question 135: To ask the Tánaiste and Minister for Finance if he is considering new proposals or methods to remove the 21% VAT on fees for non-resident artists performing here; and if he will make a statement on the matter. [19252/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I should explain that the VAT rating of goods and services is subject to EU VAT law with which Irish law must comply. Under Article 132 of the EU VAT Directive member states are allowed to exempt certain cultural activities. This exemption is applied differently across the various Member States of the EU.

In Ireland, we apply the exemption to the promotion of and admissions to certain live theatrical or musical performances. This very broad exemption is allowed under the EU VAT Directive. In effect, this means that the promoter realises the full value of admission fees as no VAT is applied to admission fees. In this regard, the current exemption is already very generous covering a broad range of actives accessible to the wider public. In addition, one of the basic tenets of EU VAT law relates to the proper functioning of the internal market. This means that it is not possible to use VAT law to favour artists not resident in this state over artists who are resident in the state.

In relation to providing a VAT exemption for performance fees charged by musical or theatrical performers to not-for-profit arts organisations, the position is that the VAT treatment of a particular good or service is determined by the nature of the good or service, and not by the status of the customer. There is no provision in European VAT law that would allow for an exemption from VAT on supplies by non-resident artists when they perform for not-for-profit cultural organisations as such an exemption would have to apply to all such performers. It is estimated that this would cost in excess of €20 million. All performance fees are therefore liable to VAT at the standard rate of 21 per cent.