Written answers
Tuesday, 29 January 2019
Department of Finance
VAT Rate Reductions
Pearse Doherty (Donegal, Sinn Fein)
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168. To ask the Minister for Finance the estimated cost of reducing VAT to a rate of 0% on household utility bills; if this is feasible under EU rules; and if he will make a statement on the matter. [4006/19]
Paschal Donohoe (Dublin Central, Fine Gael)
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The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. The VAT Directive provides that Member States may apply either one or two reduced rates of VAT to certain goods and services listed in Annex III of the Directive. In addition, the Directive allows for historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III. Ireland has retained the application of the reduced rate of VAT, 13.5%, to the supply of fuel, gas, oil and electricity services for domestic use, and, under the Directive, the rate applicable to such services cannot be reduced below 12%. It is not possible, therefore, to apply a 0% rate to household utilities.
I am advised by the Revenue Commissioners that VAT returns do not identify specific transactions or activities and therefore it is not possible to estimate the cost of reducing the VAT rate on these specific services.
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