Ciarán Lynch (Cork South Central, Labour)
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Question 87: To ask the Minister for Finance when he will sign the ministerial order regarding the leisure sector arising from section 117(2)(b) of the 2010 Finance Act; and if he will make a statement on the matter. [19512/11]

Michael Noonan (Limerick City, Fine Gael)
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Section 117 of the Finance Act 2010 included provision to make public bodies subject to VAT with effect from 1 July 2010 in accordance with the European Court of Justice ruling against Ireland of 16 July 2009 in Case C-554/07. In summary, the VAT Act 1972 was amended to provide that public bodies, including local authorities, are made subject to VAT. More specifically, they are subject to VAT where they engage (i) in economic activities; (ii) in any activities as outlined in Annex I of the EU VAT Directive, unless the activity is carried out on such a small scale as to be negligible; and (iii) in the case of their regulatory capacity as a public authority, when their treatment as non-taxable could lead to a distortion of competition. These are subject of course to the activity not being otherwise exempted from VAT.

During the debate on the Finance Bill, the then Minister for Finance undertook to look again at the provisions, in particular in relation to the supply of community and sports facilities by public bodies, especially local authorities. The legislation was accordingly amended to provide that the new VAT rules for public bodies, in relation to the supply of sports and community-type facilities, will be commenced by order, rather than on 1 July 2010. This was to allow for a more complete examination of the issues, including an analysis of how the new rules might best be implemented. In the circumstances, I have no immediate plans to introduce such an Order.