Eamon Gilmore (Dún Laoghaire, Labour)
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Question 120: To ask the Minister for Finance if a VAT registered company is eligible for a VAT refund on services or goods purchased, which are entirely covered by their insurer, and for which they will be reimbursed; the party which is liable to pay VAT on services provided when the cost incurred by a VAT registered company is covered by their insurer, the VAT registered purchaser of the service, the provider of the service, or the insurer; and if he will make a statement on the matter. [21845/09]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that an insurance company normally covers a customer only for the actual loss incurred when damage is caused to the customer's property. Where the insured customer is a VAT-registered business it is usually entitled to an input credit for any value-added tax charged on the repairs to, or the replacement of, an asset used in the business. Therefore, the actual cost of the damage to the business is the net VAT-exclusive amount and this is the amount normally reimbursed by an insurance company.

Where a VAT-registered person is indemnified under a policy of insurance in respect of the cost of the services of a barrister or solicitor, section 5(4B) of the Value-Added Tax Act 1972, as amended, deems the services to be supplied to that person and, accordingly, the person may claim an input credit in respect of the VAT on those costs subject to the usual rules.