Seán Ó Fearghaíl (Kildare South, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

To ask the Minister for Finance if he will abolish the level of VAT levied on student textbooks accessed via tablet computer; and if he will make a statement on the matter. [54720/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. In Ireland the zero rate applies to printed books, including atlases, children’s picture, drawing and colouring books and books of music. It is possible for Ireland to apply the zero rate to printed books because Ireland applied the zero rate to these books on and before 1 January 1991, and the EU VAT Directive provides a derogation for such exceptional VAT treatment to continue to apply. However, the VAT Directive does not allow goods and services to apply at the zero rate which were not in place at that rate on 1 January 1991. As student textbooks accessed via tablet computers were not applied at the zero rate in 1991 it is not possible to apply the zero rate to them now. Furthermore, under the EU VAT Directive, all digitised publications, regardless of their rate when printed (for example, a book liable at zero rate), are treated as the supply of a service liable at the standard rate of VAT, which in Ireland is 23%. E-books, online newspaper subscriptions and online information services purchased via download over the Internet are also considered the supply of services liable for VAT at the standard rate. There is no option under EU VAT law to exempt from VAT student textbooks accessed via tablet computers, or to apply a reduced rate to them.

Eoghan Murphy (Dublin South East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

To ask the Minister for Finance his views on a residential scheme (details supplied). [54746/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The interest restriction of 75% applying to residential lettings was introduced in the April 2009 supplementary budget as part of an urgent revenue-raising package aimed at stabilising the public finances. The context in which the 2009 measure was introduced, i.e. the need to stabilise public expenditure, still exists. Under the terms of the EU/IMF Programme of Financial Support for Ireland, the State is committed to further substantial reductions in public expenditure. I am informed by the Revenue Commissioners that a breakdown between rent received from residential property and other types of property is not sought or provided in tax returns. However based on personal income tax returns filed by non-PAYE taxpayers for the year 2010, the latest year for which this information is available, and making certain assumptions about the data it is estimated that the estimated cost of restoring the level at which individuals can claim interest repayments against tax for residential rental properties from 75% back to 100% could be in the region of €112m in a full year. The estimated cost is based on assuming that tax relief was allowed at the top income tax rate of 41% and the figure provided could therefore be regarded as the maximum Exchequer cost in respect of those taxpayers. This figure is subject to adjustment in the event of late returns being filed or where returns already filed are subsequently amended.

As rental income of companies is returned as net of interest on borrowings, the figures for interest are not separately distinguishable and there is, therefore, no basis on which an estimate of the cost in respect of companies can be given. It should be noted that any corresponding data returned by PAYE taxpayers in the income tax return form 12 is not captured in the Revenue computer system. However, any PAYE taxpayer with non-PAYE income greater than €3,174 is required to complete an income tax return form 11. This return is the source of the figure provided in this reply in respect of individuals.

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Any proposed changes in VAT must be considered in the context of the EU VAT Directive, with which Irish VAT law must comply. The zero rate of VAT applies to the supply of newspapers in the UK, as well as in Belgium and Denmark. The VAT Directive provides that where Member States applied a zero rate of VAT to goods and services on 1 January 1991 they are entitled to retain those zero rating provisions, but cannot introduce any new ones. It is under this provision that the UK applies a zero rate to sales of newspapers as they applied the zero rate to the supply of newspapers on 1 January 1991. In the same way Ireland applies the zero rate to foods and medicines because the zero-rating provision dates back to 1991. However, as Ireland did not apply a zero rate to newspapers on 1 January 1991 we are not in a position to apply a zero rate to such supplies.

I would draw to the Deputy’s attention, however, that the VAT rate on newspapers was reduced from 1 July 2011 in the Finance (No. 2) Act 2011 from the 13.5% reduced rate to the new lower reduced rate of 9%. This VAT reduction was welcomed in general by the print media at the time.