Martin Heydon (Kildare South, Fine Gael)
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Question 186: To ask the Minister for Finance the reason services provided by Eircom are charged at a VAT rate of 23% while ESB services are charged at 13%; and if he will make a statement on the matter. [29333/12]

Michael Noonan (Limerick City, Fine Gael)
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VAT is charged on the supply of goods and services at different VAT rates, which are subject to the requirements of EU VAT law. The supply of electricity is liable to VAT at the 13.5% reduced rate, as specified in paragraph 17 of Schedule 3 of the Value-Added Tax Consolidation Act 2010. It is possible for Ireland to apply the 13.5% reduced rate to electricity under Title VIII of the EU VAT Directive. The supply of telecommunication services, however, is liable to VAT at the standard rate of 23%. The VAT Directive provides that the standard VAT rate must be applied to these services and as such it is not possible for Ireland to apply the 13.5% reduced rate to them.