Written answers

Tuesday, 2 December 2014

Department of Finance

VAT Rate Application

Photo of Clare DalyClare Daly (Dublin North, United Left)
Link to this: Individually | In context | Oireachtas source

227. To ask the Minister for Finance the reason utility companies are instructed to levy VAT on the PSO charge and the legislative basis for this instruction. [46370/14]

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

With regard to the application of VAT on electricity bills supplied by utility companies, in accordance with section 37(1) of the Value-Added Tax Consolidation Act 2010, the amount on which VAT is chargeable is the total consideration receivable by the supplier, "including all taxes, commissions, costs and charges whatsoever", but not including the VAT itself.  This reflects EU VAT law, with which Irish tax law must comply.  In this regard, Article 78 of the EU VAT Directive provides that the taxable amount shall include "taxes, duties, levies and charges, excluding the VAT itself". 

In this respect, where the charge for a supply of service, such as an electricity bill, includes the Public Service Obligation levy, VAT law dictates that VAT should be calculated on the PSO levy element of the charge as well as the charge for the service.  The same situation applies in the case of other excises, including for example excises on petrol, auto-diesel, tobacco and alcohol products.

Comments

No comments

Log in or join to post a public comment.