Michael Healy-Rae (Kerry, Independent)
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161. To ask the Minister for Finance to outline his views on a matter (details supplied) regarding the taxation of locum doctors; and if he will make a statement on the matter. [31481/16]

Michael Noonan (Limerick City, Fine Gael)
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In general, the services provided by a doctor, including a locum doctor, to a patient in relation to the diagnosing, treating or alleviating an ailment is exempt from VAT. Therefore there is no VAT on the fee charged to the patient by the doctor providing the service regardless of whether the doctor is an employee, self-employed or a partner in a medical practice.

In general, the tax treatment of payments to doctors or locum doctors depends on whether the individual is engaged under a contract of service as an employee or under a contract for service as a self-employed taxpayer. If the doctor is self-employed in relation to the services provided, then the individual is assessable under Schedule D, Case II under the self-assessment system. If the doctor provides the medical services as an employee, then his or her remuneration from that engagement is subject to deductions at source under the PAYE system. For example, where a doctor is engaged for short-term work in a GP practice, these engagements are considered to be a contract of service. The locum doctor is an employee and payments made to them by the GP are subject to the appropriate deductions under the PAYE system. In neither of these situations, where the doctor is self employed or employed,doesacharge to VAT arise.

However, where the services of a doctor are provided by a company, such as a recruitment agency, the profits of the company are assessable to Corporation Tax. The doctor is taxed under the PAYE system as either a director or an employee in respect of fees or salary received from the company. In these circumstances the company does not provide the medical diagnosis or carry out the medical procedures. Revenue would regard this service as the provision of staff and, as such, is subject to VAT at the standard rate, which is currently 23% in Ireland. The company is also entitled to deduct VAT charged on most goods and services which are for the purposes of a taxable business.

VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC) with which Irish VAT law must comply. The Directive provides for an exemption from VAT for supplies of certain medical services. In compliance with the Directive, the provisions in Irish VAT legislation apply the VAT exemption to the professional medical care services as recognised by the Department of Health. Those medical care services are generally supplied by health professionals who are enrolled, registered, regulated, or designated on the appropriate statutory register provided for under the relevant legislation in force in the State or equivalent legislation applicable in other countries.

I cannot comment on the particular details given by the Deputy as there is not enough information to determine for VAT purposes what the supplies being referred to are and if, VAT should apply or not to those services.