Brendan Griffin (Kerry South, Fine Gael)
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68. To ask the Minister for Finance if he will provide further consideration to ways to provide a 9% rate of value added tax for residential construction services; and if he will make a statement on the matter. [19019/15]

Michael Noonan (Limerick City, Fine Gael)
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Annex III of the EU VAT Directive allows Member States to apply a reduced rate to the construction, repair and renovation of housing but not to non-residential construction. While most Member states apply the standard rate to construction services, Ireland has historically applied the 13.5% reduced rate of VAT to all construction services under a derogation from the EU VAT Directive.  This derogation is only permissible where the VAT rate applying is 12% or greater.  Accordingly, it is not legally possible to introduce a 9% rate of VAT on non-residential construction services.  Having said that, it is possible to apply the 9% VAT rate to the construction of residential properties, but as I have said before this would involve having two separate VAT rates applying to construction services, would be difficult to administer and could lead to underpayment of VAT.  Accordingly, I have no plans to apply different rates to construction services.