Derek Nolan (Galway West, Labour)
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47. To ask the Minister for Finance if he will broaden the remit of those businesses which benefit under the special VAT rate of 9% for bus operators working in the tourism industry; and if he will make a statement on the matter. [6975/14]

Michael Noonan (Limerick City, Fine Gael)
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The transport of passengers and their accompanying baggage is exempt from VAT. This includes services provided by the coach and bus sector. This means that a person who provides a bus or coach service does not register for VAT and does not charge VAT on the supply of their services.  This also includes the hiring of a bus or coach with a driver.  Persons who are exempt from VAT cannot recover VAT on goods and services, such as fuel, tyres and mechanic charges, used for the purposes of the person's coach service.

VAT law in Ireland must comply with the EU VAT Directive.  As passenger transport was exempt in Ireland on 1 January 1978, it is possible under the VAT Directive to continue to apply that exemption.  With regard to broadening the 9% VAT rate so that it applies to transport services supplied by bus operators working in the tourism industry, I would point out that while it is possible under the EU VAT Directive to introduce VAT on passenger transport services, Ireland has traditionally exempted this service and this reduces the cost of passenger transport for the users of the service.