Sandra McLellan (Cork East, Sinn Fein)
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142. To ask the Minister for Finance the reason a utility company (details supplied) which offers a discount can apply the value added tax before it deducts the discount; and if he will make a statement on the matter. [14058/15]

Michael Noonan (Limerick City, Fine Gael)
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VAT is a consumption tax, that is, it is a tax that is paid by the final consumer of the good or service.  VAT is an EU-wide tax and Irish VAT law must comply with the EU VAT Directives. Section 37(1) of the VAT Consolidation Act 2010 provides that VAT is chargeable on the full consideration which a taxable person becomes entitled to receive in respect of or in relation to a supply of goods or services "including all taxes, commissions, costs and charges whatsoever" but not including the Value-Added Tax itself.  

The Revenue Commissioners have advised me that their understanding is that, in general, utility providers offer discounts in two ways.  The first is a percentage discount, say 5%, on the standard energy unit price.  The discounted price, in this case 95% of the standard energy unit price, is then used to calculate the VAT-inclusive bill amount.  In this way the customer does not pay VAT on the 5% discount.  The second way is by means of a bill credit or cashback.  The bill credit or cashback amount is offset against the VAT-inclusive bill.  Take, for example, a customer whose VAT-inclusive bill is €227 made up of €200 plus €27 VAT.  If this customer receives a bill credit or cashback of €100 then the customer's bill is only €127.  The utility provider accounts for VAT on the VAT-inclusive amount of €127 (VAT-exclusive amount of €112 plus €15 VAT at 13.5% on the €112) being the full consideration which the provider becomes entitled to receive in relation to that supply.  The customer's bill credit or cashback of €100 is essentially a VAT-inclusive discount made up of a VAT-exclusive amount of €88 plus €12 VAT at 13.5% on the €100).  If this is the practice described by the Deputy then it is in line with VAT legislation. 

Brian Stanley (Laois-Offaly, Sinn Fein)
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143. To ask the Minister for Finance if consideration will be given to the provision of grant aid to voluntary groups who install defibrillators for community use; and that the grant would be equivalent to the 23% value added tax that is charged on the purchase price of defibrillators. [14117/15]

Michael Noonan (Limerick City, Fine Gael)
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The VAT rating of goods and services is constrained by the requirements of EU VAT law with which Irish VAT law must comply.  Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate of 23%. Parts or accessories and training are also liable to VAT at the standard rate.

There is no provision in the EU VAT Directive that would make it possible to exempt from VAT or apply a zero rate to the supply of defibrillators. Under the VAT (Refund of Tax) (No.15) Order, 1981 it is possible for individuals to obtain repayment of VAT expended on certain goods and appliances which assist persons with a disability to overcome that disability.  In this context, a defibrillator purchased by or on behalf of an individual may qualify for a VAT refund.