Michael Noonan (Limerick City, Fine Gael)
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Bottled water is subject to the standard VAT rate.  The standard rate is the VAT rate applied to bottled water in the majority of EU Member States.  Prior to 1992 bottled waters and fruit juices had applied at the zero rate, but were made subject to the standard rate from 1 November 1992 in order to correct a competitive anomaly, as similar competing products such as soft drinks were standard rated. The change in the VAT treatment coincided with the removal of excise duty from bottled water.

Where a product was zero rated prior to 1 January 1991 but subsequently standard rated, it is not possible to reintroduce the zero rate for that product.  However, under Annex III of the EU VAT Directive, Member States are permitted to apply a reduced rate of not less than 5% to bottled water.  It would therefore be possible to apply our reduced rate of 9% or 13.5% to these drinks.  However, a reduction in the rate of VAT on such a product would be costly to the Exchequer and I have no plans to reduce the rate of VAT on bottled water. Such a reduction would also recreate the competitive anomaly that was corrected in 1992.