Written answers

Tuesday, 22 March 2016

Department of Finance

VAT Rate Application

Photo of Michael CreedMichael Creed (Cork North West, Fine Gael)
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100. To ask the Minister for Finance the reason value added tax is levied at the higher rate on protective clothing for motor cyclists; if he will review this matter; and if he will make a statement on the matter. [5278/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply.  The VAT Directive does not make specific provision for a reduced or zero rate, or an exemption from VAT, to apply to safety equipment, including helmets and visibility clothing.  As such, they are subject to the standard VAT rate, which is currently 23%.   

However, for historic reasons the zero rate of VAT applies to safety clothing, helmets and visibility clothing, for children under 11 years of age. Paragraph 10(1) of Schedule 2 to the Value-Added Tax Consolidation Act 2010 provides for the application of a zero rate of VAT on clothing described, labelled, marked or marketed as being for children under 11 years of age up to & including chest size 32; waist size 26; height 152 cm or other equivalent sizes, and children's footwear up to and including size 5½ (38 continental or equivalent). 

As Ireland applied the zero rate to clothing and protective clothing for children up to 11 years of age on 1 January 1991, we are entitled to retain that zero rated application.  However, as the standard VAT rate applied to safety equipment and safety clothing for adults and older children on 1 January 1991, it is not possible to apply a reduced or zero rate to them, nor to exempt them from VAT.

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