Written answers

Thursday, 14 February 2019

Department of Finance

VAT Rate Application

Photo of Maureen O'SullivanMaureen O'Sullivan (Dublin Central, Independent)
Link to this: Individually | In context | Oireachtas source

31. To ask the Minister for Finance his views on whether there is a fairer way to class various products for VAT rather than standardised rates, which can be subject to changes that make significant differences to certain industries; and if he will make a statement on the matter. [7356/19]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services must be charged to VAT at the standard rate unless they fall within particular categories of goods and services specified in the VAT Directive. VAT rating is determined on the basis of particular goods and services, not by goods or services as a whole.

Under existing VAT rating rules, Member States must apply a standard VAT rate of at least 15% and may apply up to two reduced VAT rates of 5% or more to a set list of socially inclined goods and services. Member States may also retain historic VAT treatment that applied before 1 January 1991, including the application of a zero rate or a rate below 5%.

Ireland operates a standard VAT rate of 23%, reduced VAT rates of 13.5% and 9%, and historically applies the zero rate and a super-reduced rate of 4.8%.

On 18 January 2018 the European Commission published a proposal on the Simplification of VAT rates, which allows greater freedom for Member States in setting VAT rates in line with the move to the definitive destination based system of VAT. The proposal will be discussed at European Council and must be agreed unanimously by all Member States before being adopted. It is expected that discussions on the proposal will be robust and it is likely that the final agreed text will be the subject of many compromised amendments.

Comments

No comments

Log in or join to post a public comment.