Brendan Griffin (Kerry South, Fine Gael)
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80. To ask the Minister for Finance if he will rule out any plans to apply VAT to activities in the greyhound industry; and if he will make a statement on the matter. [15964/14]

Michael Noonan (Limerick City, Fine Gael)
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Under EU VAT law, with which Irish VAT law must comply, economic activity in general is subject to VAT. In this context, the greyhound industry involves a variety of supplies of goods and services that come within the scope of VAT.  In the first instance, betting on greyhound racing is generally exempt from VAT.

With regard to greyhound food, the supply of dog food is liable to VAT at the standard VAT rate of 23%.  However, a concession was introduced in Finance Act 1995, to provide for a reduced VAT rate to apply to the supply of greyhound feeding stuff "which is packaged, advertised or held out for sale solely as greyhound feeding and which is supplied in units of not less than 10 kilograms".  The VAT rate applying in this case is 13.5%.  This reduction was introduced to specifically aid the Irish greyhound breeding industry as food for dogs and other domestic pets applies at the 23% standard rated.

The supply of the service of training of greyhounds is subject to VAT at the 23% standard rate.

The supply of live greyhounds is currently subject to VAT at the super reduced VAT rate of 4.8%. However, the European Court of Justice in Case C-108/11 judged that Ireland has been incorrect in applying the 4.8% rate to the supply of greyhounds and certain horses, and to the hire of horses.  As a consequence of this judgement provision was made in Finance (No. 2) Act 2013 to apply the 9% reduced VAT rate to supplies of greyhounds.  However, the change in VAT rate has not yet been introduced. The Revenue Commissioners are currently in the process of finalising the administrative procedures around the legislative change and it is anticipated that the new rate will take effect in the next few months.

With regard to the supply of greyhound insemination services, under current arrangements, the majority of  greyhound insemination services are subject to the 13.5% reduced VAT rate, while the 4.8% super reduced rate applies specifically to 'no litter, no fee' insemination services.  The judgement of the European Court of Justice also ruled that the 4.8% rate should not be applied to these services.  In this regard, the Finance (No. 2) Act changes also include provision for the application of the 13.5% VAT rate to the supply of all insemination services - whether by artificial or natural means, or under a 'no litter, no fee' arrangement.

The increase in the VAT rate to 9% for supplies of greyhounds and to 13.5% for 'no litter, no fee' insemination services represents the lowest possible VAT rates allowable under EU VAT law and Ireland's VAT rate structure for these particular goods and services.