Seán Kyne (Galway West, Fine Gael)
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310. To ask the Minister for Finance the applicability of value-added tax to the activities of Outdoor Education Ireland; if the organisation operated on behalf of the education and training boards is exempted from this tax for some business operations; if so, if this is in keeping with fair competition, in view of the number of small and medium-sized enterprises operating in this sector, and their importance to rural communities; and if he will make a statement on the matter. [15807/15]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that paragraph 4(3) of Schedule 1 of the Value-Added Tax Consolidation Act 2010, in line with the EU VAT Directive, provides that children's and young people's education and school education provided by educational establishments recognised by the State and by other persons supplying education of a similar kind is exempt from VAT.  The exemption can be availed of by both educational establishments recognised by the State and by other persons once the relevant criteria are met so there is no issue of unfair competition between the two categories of providers.

While the nature and scope of what is interpreted as education that qualifies for the exemption is extensive and wide-ranging, in general, it includes classes that are led and directed, rather than merely supervised.  To qualify for the VAT exemption, outdoor education activities to which the Deputy refers must be provided in an appropriate sporting facility, be provided as a structured course, confer a level of skill or ability which can be evaluated by comparison with objective standards and there must be a student and tutor relationship. It is not a necessary condition that these outdoor education lessons take place during school hours or indeed in a school setting but it is a necessary condition that the lessons are similar to the programme, objectives and outcomes set out in the Department of Education and Science syllabus.  In contrast, where similar activities are provided by Outdoor Education Centres to adults they are generally liable to VAT since they are regarded as purely recreational.

I would point out that an establishment or person who provides such VAT-exempt education does not register for VAT and does not charge VAT on the supply of their services.  Persons who are exempt from VAT cannot recover VAT incurred on goods and services used for their provision of education, such as the purchase of fuel or IT equipment or software licenses.