Róisín Shortall (Dublin North West, Social Democrats)
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33. To ask the Minister for Finance if he will consider altering the current services threshold for VAT registration in order that the significant step effect for small businesses whose turnover exceeds €37,500 is eradicated. [30122/16]

Michael Noonan (Limerick City, Fine Gael)
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VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply. The EU VAT Directive provides that VAT registration thresholds may only be raised by Member States to maintain their value in real terms, that is, they may only be increased in line with inflation. The VAT thresholds were increased to their current values on 1 May 2008. As the Central Statistics Office figures show the consumer price index is below the level it reached in 2008, it is not possible to increase the thresholds. I would point out, however, that Ireland's VAT registration threshold for small enterprises supplying services is the seventh highest in the EU while the goods threshold is the third highest.