Ciarán Lynch (Cork South Central, Labour)
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Question 81: To ask the Minister for Finance the progress that has been made regarding the introduction of provisions to ensure compliance with the European Court of Justice ruling regarding VAT (details supplied); and if he will make a statement on the matter. [17710/11]

Michael Noonan (Limerick City, Fine Gael)
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In its ruling of 16 July 2009 in Case C-554/07, the European Court of Justice found that Ireland had failed to correctly transpose EU VAT law regarding public bodies including local authorities. In order to comply with the ruling, it was necessary to make public bodies subject to VAT and the Finance Act 2010 included a provision to this end. This provision is now contained in Section 14 of the Value-Added Tax Consolidation Act, 2010. In effect, this means that from 1 July 2010 certain goods and services provided by local authorities are subject to VAT, especially where competition arises with private sector providers who have to apply VAT. Services that are liable to VAT include refuse collection, landfill and recycling services; off-street parking; toll roads; and rent from certain lettings of commercial property. It should be noted that such services were already subject to VAT if provided by a private operator. The standard or the reduced VAT rate applies as appropriate. Refuse collection is subject to the reduced VAT rate of 13.5% and off-street parking fees are liable to VAT at the standard rate of 21%. However, other services operated by public bodies including local authorities are not subject to VAT as they are otherwise exempted. In that context, for example, the supply of water, education, health and passenger transport services are not subject to VAT as they are otherwise exempted from VAT. Examples of the types of activities by public bodies where a charge applies, which will remain outside the scope of VAT, include parking fines, fees for passports, driving licences, development levies, casual trading licenses and certificates of compliance. These are purely regulatory functions.