Joan Burton (Dublin West, Labour)
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Question 177: To ask the Tánaiste and Minister for Finance his views on, as a measure to discourage drink-driving, implementing an exemption on VAT on the purchase by publicans of mini-buses or other suitable modes of transport for the express purpose of ferrying customers to and from their licensed premises; and if he will make a statement on the matter. [5107/08]

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. Under the VAT Directive, passenger transport is treated as an activity that is exempt from VAT. This means that all providers of passenger transport cannot charge VAT on the services they supply and cannot recover VAT on the goods and services that they purchase. Essentially, only businesses that can register for VAT are allowed to charge VAT and therefore recover VAT.