Marc Ó Cathasaigh (Waterford, Green Party)
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86. To ask the Minister for Finance his views on applying a zero VAT rate on heat pumps; and if he will make a statement on the matter. [21306/23]

Michael McGrath (Cork South Central, Fianna Fail)
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The Deputy should note that under the VAT Directive it is not possible to reduce the VAT on heat pumps to zero. However, following changes agreed last year in Annex III of the aforementioned Directive, there is scope to reduce the VAT rate in highly efficient low emissions heating systems to a reduced VAT rate. In Ireland that would mean a rate of 9% or 13.5%.

However, these systems have to comply with very specific technical requirements, meeting the emission benchmarks laid down in Annex V of Commission Regulation (EU) 2015/1189 and in Annex V of Commission Regulation (EU) 2015/1185 respectively and having been attributed an EU energy label to show that the criterion referred to in Article 7(2) of Regulation (EU) 2017/1369 is met. In summary, these criteria are very exacting.