David Stanton (Cork East, Fine Gael)
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Question 95: To ask the Tánaiste and Minister for Finance his views on introducing a VAT reduction, exemption or refund for community voluntary groups purchasing emergency life saving medical equipment and supplies such as defibrillators, oxygen and airway management equipment and so on in view of the important role these groups play in the community and the fact that many of these groups are wholly reliant on charitable donations to fund their work; and if he will make a statement on the matter. [34659/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The position is that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In relation to the issue of applying an exemption of reducing VAT rates for a certain category of consumer, the position is that the rate of VAT which applies to a particular good or service is determined by the nature of the good or service, and not by the status of the consumer. It would not be possible to reduce or remove VAT on goods purchased by community voluntary groups.

In relation to introducing a VAT refund the position is that charities and non-profit groups engaged in non-commercial activity are exempt from VAT under the EU VAT Directive. This means they do not charge VAT on the services they provide and cannot recover VAT incurred on goods and services that they purchase. Essentially only VAT registered businesses which charge VAT are able to recover VAT.

The tax code already treats charities in a favourable manner. The tax code currently provides exemption for charities from Income Tax, Corporation Tax, Capital Gains Tax, Deposit Interest Retention Tax, Capital Acquisitions Tax, Stamp Duty, Probate Tax, Dividend Withholding Tax and the uniform scheme of tax relief for donations.

Brian O'Shea (Waterford, Labour)
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Question 96: To ask the Tánaiste and Minister for Finance the position regarding the concerns of a person (details supplied) in County Waterford in the matter of the energy tax directive 2004. [34678/07]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The 2003 EU Energy Tax Directive incorporated special derogations which allowed specific excise duty reliefs to be applied in a number of Member States. In the Irish context, these derogations allowed for reduced rates to apply to fuel used for public transport services which includes school transport services.

While these derogations expired on 31 December 2006, Ireland, along with other Member States, sought retention of its derogations beyond that date. However the European Commission, who are the deciding authority, have to date refused all such requests. The Commission maintain that, in keeping with the EU Energy Tax Directive, Member States must apply at least the EU minimum rates of excise on fuels in such circumstances and that any further favourable excise treatment is not allowable. In this regard the Commission's decision was published on its website in March 2007. At the Commission's behest my officials have indicated that Ireland will avail of the forthcoming Finance Bill to make the necessary legislative changes to conform with the Directive.

In the circumstances, the relevant line Departments who have primary responsibility in this regard are, in conjunction with my Department, exploring alternative non-tax support mechanisms that could be put in place where appropriate to maintain the assistance currently being provided, subject of course to compatibility with EU State Aid requirements. In the interim the reduced rates applicable to fuel used will be maintained.