Willie Penrose (Longford-Westmeath, Labour)
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262. To ask the Minister for Finance in the context of a recent ruling by the Revenue Appeals Commissioner which found that debt management services should not be subject to the imposition of Value Added Tax, if he will now direct the Revenue Commissioners to cease charging Value Added Tax on personal insolvency and bankruptcy advice, and other such debt arrangements; and if he will make a statement on the matter. [25083/15]

Michael Noonan (Limerick City, Fine Gael)
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I am informed by the Revenue Commissioners that the service provided by Personal Insolvency Practitioners does not qualify for exemption in accordance with the VAT Directive, Irish VAT law, and relevant decisions of the European Court of Justice.  Therefore, like other insolvency services such as those provided by liquidators, receivers and examiners, the service provided by a Personal Insolvency Practitioner is liable to VAT at the standard rate, currently 23%.   I would point out that under a Personal Insolvency Arrangement, the Personal Insolvency Practitioner's fees are ultimately deducted from the dividend payments to the creditors under the arrangement rather than charged to the debtor. As the debtor is availing of a Personal Insolvency Arrangement because of their insolvent position, it is the creditor who is bearing the ultimate cost of the fees and the VAT on the fees.

I am advised by the Revenue Commissioners that there has been no change in the VAT treatment of insolvency services which I have just described.  I would point out that any taxpayer who is dissatisfied with a decision of the Revenue Commissioners has a right of appeal to the Office of the Appeal Commissioners.  The Appeal Commissioner hears the case presented by both Revenue and the taxpayer and comes to a determination based on legislation and the facts presented.  Cases before the Appeals Commissioners are held in camera and a decision of the Appeal Commissioner, if accepted by both parties, is specific to the facts of that case only. The Appeal Commissioners do not publish their decisions.  Where one of the parties to the appeal is dissatisfied with the decision of the Appeal Commissioners there is a subsequent right of appeal to the Circuit Court, the High Court and the Court of Appeal, as appropriate.