Michael Healy-Rae (Kerry, Independent)
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78. To ask the Minister for Finance if he will address a matter (details supplied) regarding VAT rates; and if he will make a statement on the matter. [3631/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply.  In accordance with the Value-Added Consolidation Act, 2010 the supply of the service of the installation of a fixture is liable to tax at the reduced rate of 13.5%. The installation of a floor or other fixture qualifies for the reduced rate where the floor becomes an integral part of the property and cannot be removed without substantial damage being caused to the floor itself or to the property.

Where a service constitutes the installation of a floor or other goods that can be removed without causing any damage to the floor or other goods or to the property then that service is the installation of a fitting, which is liable to the standard rate of 23%.  The service provider should determine on a case by case basis whether the service provided is the installation of fixtures liable at the 13.5% rate or the installation of fittings liable at the 23% rate.

Where a supply includes the supply and installation of fixtures in a property, the supply is subject to the two-thirds rule, which requires that to benefit from the 13.5% rate the value of the goods cannot exceed two thirds of the total amount of the supply.

Where a service provider is providing a service of installation of fixtures to certain Principal Contractors, it is the Principal Contractor who is liable to VAT at 13.5% rather than the service provider.