Stephen Donnelly (Wicklow, Independent)
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Question 119: To ask the Minister for Finance if, as part of budget 2012, he will consider reducing the VAT rate applying to artisan makers of musical instruments here from the higher rate of VAT, consistent with other businesses that are highly labour intensive and are VAT rated at 13.5%. [35583/11]

Michael Noonan (Limerick City, Fine Gael)
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The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. Under the VAT Directive Member States may only apply the reduced VAT rate to those goods and services which are listed under Annex III of the VAT Directive. The sale of artisan musical instruments is considered the sale of a good for VAT purposes and not the service that went into making the good. Annex III does not provide for a reduced rate of VAT to be applied to musical instruments, which are consequentially subject to the standard VAT rate of 21%.