Pat Buckley (Cork East, Sinn Fein)
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246. To ask the Minister for Finance if his Department will consider lowering the VAT rate to 0% on the sale and repair of bicycles and electric bicycles; if his Department will follow the lead of Belgium which has already passed legislation to take advantage of European rule changes; and if he will make a statement on the matter. [17838/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I understand that the proposal for reform of VAT rates is currently being finalised, this process involves, inter alia, ensuring consistent translations of the text in every working language of the European Union. Once finalised, I expect the proposal will be published in the Official Journal of the European Union in the coming weeks.

Officials in my Department are currently reviewing the options now available to Ireland in setting VAT rates. This will include consideration of the new options available to Member States when setting VAT rates as well as the new limitations introduced on how reduced rates may be applied.

Decisions about tax changes are generally taken in the context of the Budget and, as part of our normal annual Budget preparations, various options for tax policy changes will be considered by the Tax Strategy Group prior to Budget 2023. The papers presented to the Tax Strategy Group, including a paper on VAT, are published in advance of the Budget.

Darren O'Rourke (Meath East, Sinn Fein)
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247. To ask the Minister for Finance if he has examined the VAT rates applied to the sale of repaired or used goods given the need to promote the sale of these goods in line with the circular economy; and if he will make a statement on the matter. [17855/22]

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 general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate or exempt from VAT.

However, the Deputy may be interested to know about the margin scheme, which is used as a means of reducing the possibility of double taxation on the sale of second-hand goods. It operates by allowing taxable dealers who deal in margin scheme goods, pay VAT on the difference between the sale price and purchase price of certain second-hand goods. Broadly speaking, for the purpose of the margin scheme, second-hand goods are moveable goods which are suitable for use either as they are or after repair. The VAT rate which applies to a sale of goods under the margin scheme is, with some exceptions, the same rate of VAT which is normally applicable to the particular good. The scheme is optional however, so if a taxable dealer chooses not to operate the margin scheme, then normal VAT rules will apply.

Further information on the margin scheme can be found on the Revenue website.