Michael McCarthy (Cork South West, Labour)
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152. To ask the Minister for Finance his views on charging VAT on PIP arrangements, in view of the fact that the service is deemed non-viable in the UK; and if he will make a statement on the matter. [23755/13]

Michael Noonan (Limerick City, Fine Gael)
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I have been advised by the Revenue Commissioners that a Personal Insolvency Practitioner (PIP) will be involved in the Debt Settlement Arrangements and Personal Insolvency Arrangements as provided for in the Personal Insolvency Act 2012. Any fees charged by a PIP in connection with these services are liable to VAT at the standard rate, currently 23%. A PIP in this regard is acting in a capacity similar to liquidators, receivers or examiners, whose services are also subject to VAT at the standard rate.

With regard to the VAT treatment of such services in the UK, the activities of Insolvency Practitioners operating under the UK Individual Voluntary Arrangement procedure were held by a UK First Tier VAT Tribunal to be exempt from VAT. However, there are distinct differences between the activities undertaken by UK Insolvency practitioners and Irish PIPs. Exemptions from VAT are to be construed strictly in accordance with the EU VAT Directive, Irish VAT law, and relevant decisions of the European Court of Justice. In this context, the activities of PIP practitioners do not fall within the exempted activities outlined under paragraph 6 of Schedule 1 to the Value-Added Tax Consolidation Act 2010 and as such are liable to VAT at the standard VAT rate.