Bríd Smith (Dublin South Central, People Before Profit Alliance)
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45. To ask the Minister for Finance the number of companies that have benefitted from a VAT rate of 13.5% for short term hiring of certain means of transport including aircraft for each of the years from 2011 to 2015; the amount of VAT that was foregone for each of the years 2011 to 2015; and if he will make a statement on the matter. [34046/16]

Bríd Smith (Dublin South Central, People Before Profit Alliance)
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52. To ask the Minister for Finance the number of aircraft leasing companies that have benefitted from 0% VAT as a result of leasing to qualifying international airlines; and if he will make a statement on the matter. [34045/16]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 45 and 52 together.

I am advised by the Revenue Commissioners that as of September 2016, 2,660 companies were assigned to the primary industry description (NACE code) of renting and leasing of air transport equipment.  There are two reasons why aircraft leasing companies might not pay Irish VAT on their leasing activity:

(1) the lease is with an international airline and  therefore qualifies for the zero rate of VAT, or

(2)  the lease is with a business customer outside Ireland.  Under the normal VAT place of supply rules for cross border services the place of supply is regarded as the country in which the customer is established. The lease payments are not subject to VAT in Ireland. If the customer is established in another EU Member State the VAT position will be determined by reference to the law in that country. If the customer is established outside the EU the lease payments are outside the scope of VAT.

The number of companies and VAT payments by the aircraft leasing industry for the years requested are as shown in the following table.  I am advised that the figures are based on the industry description (NACE code) assigned to businesses on the Revenue taxpayer register.

The statistics in the VAT column of the table are net figures for all VAT paid and repaid to the aircraft leasing industry. The figures are negative as the aircraft leasing sector is generally in a net repayment position in respect of VAT for each year.  This is because, as VAT registered businesses, they are entitled to claim VAT on their inputs, but would not generally charge VAT on their outputs as the majority of their supplies are made to customers outside the State and, therefore, are not subject to Irish VAT.

With regard to the number of companies that benefit from the 13.5% VAT rate that applies to short term hiring of transport, including aircraft, and the VAT foregone on not charging the 23% standard VAT rate to these services, this information is not available. Information on the number of aircraft leasing companies that have benefitted from 0% VAT as a result of leasing to international airlines is also not available.  In relation to the VAT foregone on new means of transport, I would point out that the 13.5% reduced VAT rate charged on the hire of new means of transport is only of benefit to businesses supplying hire of transport within the State, such as businesses hiring cars. As aircraft businesses for the most part make supplies to customers outside the State, the 13.5% VAT rate is not of benefit to them.