Brendan Griffin (Kerry South, Fine Gael)
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Question 58: To ask the Minister for Finance if an educational facility (details supplied) in County Kerry will remain exempt from VAT; and if he will make a statement on the matter. [37825/11]

Michael Noonan (Limerick City, Fine Gael)
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The facility referred to by the Deputy appears to be a pet farm and playground with fishing facilities and bungalows to let. For VAT purposes, these services do not constitute educational facilities. The fees charged for entry to open farms were until recently treated as VAT exempt "lettings of immovable goods". This VAT exempt treatment followed a 1970s Revenue Appeal Commissioner's decision, in a particular case, relating to a right granted to a person to enter a house and gardens. The exemption did not apply to other income including fees charged for the use of playgrounds or income from gift shop or coffee shop sales. Irish VAT legislation must be in accordance with the EU VAT Directive and must be interpreted in a manner consistent with decisions of the European Court of Justice (ECJ). Having regard to a number of decisions of the ECJ, and a recent challenge by the owner of an historic house to the existing exemption from VAT of such activities, the entry fees to open farms and to other similar facilities could no longer be treated as fees for VAT exempt lettings. Therefore, in order to be compliant with the EU VAT Directive it was necessary to bring such fees within the charge to VAT. A start date of 1 January 2012 was chosen to allow a lead in time to prepare for the 2012 season. Full details of the changes were set out in a VAT Information Leaflet issued in August 2011.

Admission fees to open farms will be liable to VAT at the standard rate of 21% from 1 January 2012. I would point out however that an exemption from VAT may still apply to open farms in certain circumstances. Open farms, like any other service business, may opt not to register for VAT if their entrance fee turnover is under the registration threshold of €37,500 per annum. Where this is the case VAT will not apply to admission fees.

The change in the VAT treatment of entrance fees to historic houses and open farms was not optional; it was required in order to be compliant with the EU VAT Directive as interpreted by the ECJ.