Michael Healy-Rae (Kerry South, Independent)
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Question 114: To ask the Minister for Finance if he will examine ways of reducing the VAT rate on domestic energy, to alleviate fears and hardship that energy costs are having on persons with low incomes. [30867/11]

Michael Noonan (Limerick City, Fine Gael)
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I would point out that domestic fuels, namely electricity and gas, are already subject to VAT at the reduced rate of 13.5% in Ireland. The majority of EU Member States, nineteen of the 27 States, apply higher VAT rates to domestic energy than Ireland. Ireland can avail of this reduced rate because of a provision, under Article 118 of the EU VAT Directive that provides that where a reduced rate applied to a good or service on 1 January 1991, Member States can continue to avail of that reduced rate. However, this provision is restricted in that only a rate of 12% or more may apply to domestic fuels.

The level and timeframe of any changes to the Irish VAT rates will be determined in the context of the annual Budget cycle.