Martin Heydon (Kildare South, Fine Gael)
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160. To ask the Minister for Finance if he will advise on correspondence (details supplied) in relation to the application of value added tax on the fees of personal insolvency practitioners; and if he will make a statement on the matter. [14235/16]

Michael Noonan (Limerick City, Fine Gael)
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Services provided by Personal Insolvency Practitioners do not qualify for exemption in accordance with the VAT Directive, Irish VAT law, and relevant decisions of the Court of Justice of the European Union. The Court of Justice of the European Union has consistently held that the terms used to specify exemptions are to be interpreted strictly since they constitute exceptions to the general principle that VAT is to be levied on all services supplied for consideration by a taxable person.

The Deputy has acknowledged that the Personal Insolvency Practitioner fees which are built into the Debt Settlement Arrangement (DSA) or the Personal Insolvency Arrangement (PIA) and borne by the creditors are liable to VAT at the standard rate (currently 23%). In relation to professional advisory services provided to debtors in advance of proceeding with a PIA or DSA, these services are similar to those provided by accountants and other insolvency service providers such as liquidators, receivers and examiners and as such are also liable to VAT at the standard rate.