Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

Question 180: To ask the Minister for Finance the year in which a tax exemption was introduced for stud fees; and the conditions attaching to those exemptions. [19583/08]

Michael Ring (Mayo, Fine Gael)
Link to this: Individually | In context

Question 181: To ask the Minister for Finance if stud fees earned abroad by stallions which are at stud in this State for most of the year are tax exempt. [19584/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

I propose to take Questions Nos. 180 and 181 together.

The income tax exemption for stallion stud fees was introduced in 1969. The exemption was subsequently extended to cover corporation tax on its introduction in 1976. The exemption itself currently applies to profits or gains arising

to the owner, or part owner, of a stallion which is ordinarily kept on land in the State from the sale of stud services or rights to stud services within the State, or

to the part owner of a stallion which is ordinarily kept on land outside the State from the sale of stud services or rights to stud services anywhere.

In this latter case, the part owner must be engaged in bloodstock breeding within the State and must show to the satisfaction of the Revenue inspector that the part ownership of the stallion in question is primarily for the purposes of that bloodstock breeding business.

In certain circumstances, stallions which normally stand at stud in Ireland are sent abroad to the Southern Hemisphere when the breeding season has finished in Ireland. These are treated for the purposes of the exemption as being ordinarily kept on land in the State. This means that the tax exemption continues to apply but only as regards profits or gains arising from the servicing of mares within the State. Profits arising from the servicing of mares outside the State are not exempt. This exemption will terminate with effect from 31 July this year, after which time the profits or gains will be fully within the charge to tax. These changes were provided for in the Finance Acts of 2006 and 2007.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Question 182: To ask the Minister for Finance his plans to have Annex III of the EU VAT directive amended to include road safety products and thereby reduce the rate of VAT applicable on such products; and if he will make a statement on the matter. [19666/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

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 Member States may only apply the reduced VAT rate to those goods and services which are listed under Annex III of the VAT Directive. As Annex III does not include the supply of road safety products, the only rate that can apply to such products is the standard VAT rate which in Ireland is 21%.

In relation to amending Annex III of the VAT Directive, I would point out that this could only be done in the context of an overall review at Community level of reduced rates. Whilst the Commission launched a debate on reduced rates in July 2007, as yet, no specific Commission proposals have been brought forward. Generally, any significant review of the application of VAT across the different EU Member States can be complex.

Denis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Question 183: To ask the Minister for Finance if he will review the VAT rate on defibrillators; and if he will make a statement on the matter. [19674/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

The Deputy will be aware that in matters relating to the VAT rating of goods and services, I am constrained by the requirements of EU VAT law with which Irish VAT law must comply. In relation to the VAT rate that applies to defibrillators, the position is that under the VAT Directive, Member States may retain the zero rates on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. The zero VAT rate cannot therefore be applied to defibrillators which are subject to the standard rate.

In addition, Member States may only apply the reduced VAT rate to those goods and services which are listed under Annex III of the VAT Directive. While Annex III does include the supply of medical equipment for the exclusive personal use of a disabled person, it does not include defibrillators for general use. The reduced rate cannot be applied to the supply of defibrillators. Therefore the only rate of VAT that can apply to the supply of defibrillators is the standard VAT rate which in Ireland is 21%.