Kevin O'Keeffe (Cork East, Fianna Fail)
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212. To ask the Minister for Finance if a provision will be considered whereby a specific industry (details supplied) can reclaim VAT paid on certain products. [24651/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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VAT is governed by the EU VAT Directive, with which Irish VAT law must comply. The transport of passengers is exempt from VAT under Irish VAT law and bus operators are exempt from VAT on the supply of transport in this respect. Where a service is exempt under VAT law this means that the supplier of the service does not charge VAT on the supply but it also means that they are not entitled to claim VAT on any business-related expenditure. Only businesses registered for VAT who make taxable supplies are entitled to claim back VAT incurred on their inputs.

Historically Ireland operates a VAT refund order whereby persons not registered for VAT can reclaim VAT paid on touring coaches in set circumstances. However, spare parts of buses and coaches are not included under this refund order. Because the refund order historically derogates from normal VAT rules, it is not possible under EU VAT law to extend this refund order to bus and coach parts.