Michael McGrath (Cork South Central, Fianna Fail)
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Question 144: To ask the Minister for Finance if his attention has been drawn to a matter (details supplied) concerning the interaction of the carbon tax and VAT. [21947/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that in accordance with section 10(1) of the Value-Added Tax 1972 (as amended), the amount on which Value-Added Tax is chargeable is the total consideration receivable by the supplier, "including all taxes, commissions, costs and charges whatsoever" but not including the value-added tax itself. As the Deputy will be aware, VAT is an EU wide tax and Irish VAT law must comply with the EU VAT Directives. Article 78 of EU Council Directive 2006/112/EC provides that the taxable amount to which VAT is applied shall include "taxes, duties levies and charges, excluding the VAT itself". Accordingly, as in the case of excises on other products, it is correct to include any carbon tax element of a gas bill in the amount on which VAT is chargeable.