Catherine Murphy (Kildare North, Social Democrats)
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185. To ask the Minister for Finance his views on whether the 9% VAT rate may be considered as state aid in view of the fact that it gives a select number of sectors a competitive advantage. [34911/16]

Michael Noonan (Limerick City, Fine Gael)
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VAT rating is governed by the EU VAT Directive (2006/112/EC), with which Irish VAT law must comply.  Article 98 of the EU VAT Directive allows Member States to apply up to two reduced VAT rates of no less than 5% to any of the goods or services listed in Annex III of that Directive. The 9% VAT rate applicable in Ireland to the supply of certain goods and services related to the tourist industry complies with Article 98 and Annex III of the EU VAT Directive, as all the goods and services to which the 9% applies are listed in Annex III.  Where the application of a VAT rate is in compliance with the EU VAT Directive, it is compatible with the proper functioning of the internal market and cannot be considered to constitute a form of State Aid.