Written answers

Tuesday, 19 July 2011

10:00 pm

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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Question 138: To ask the Minister for Finance if any cost benefit analysis has been undertaken as to whether VAT should continue to be applied to equipment supplied to public hospitals. [21061/11]

Photo of Michael NoonanMichael Noonan (Minister, Department of Finance; Limerick City, Fine Gael)
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VAT law in Ireland is applied in accordance with EU VAT law, under the EU VAT Directive. VAT is charged on the value added to the supply of goods and services by economic entities. The status of persons receiving those goods or services does not impact on whether or how VAT is charged on those items. In this circumstance, the VAT charged on a good supplied to a hospital will be based on whether the person supplying that good is registered for VAT and the rate of VAT applying to that particular good. Whether the good is supplied to an individual, hospital or business does not factor into how VAT is charged in that situation. In this context as EU law does not allow for the circumstances of the recipient to determine how VAT is charged on a good or service, a cost benefit analysis is not necessary.

However, it should be noted that Ireland, outside of the normal VAT rules, operates a VAT refund scheme for certain donated medical instruments and appliances under Statutory Instrument 58/92. The main conditions relating to this refund scheme are that:

- the appliance or instrument is donated to a hospital;

- the appliance costs €25,390 or more in value (exclusive of tax);

- the appliance is designed and manufactured for use solely in medical research or in diagnosis, prevention or treatment of illness;

- the appliance is purchased through voluntary donations, such that no part of the funds used in the purchase is provided directly or indirectly by the State, a State body or any public or local authority; and,

- the appliance is subject to a recommendation by the Minister for Health that, having regard to the requirements of the health services in the State, a refund of tax would be appropriate.


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