Colm Burke (Cork North Central, Fine Gael)
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51. To ask the Minister for Finance if he will clarify whether the recently approved amendment to the Finance Bill 2023 to apply a zero per cent VAT rate for the supply and installation of solar panels is applicable to trade installers of solar panels or individuals who wish to purchase and install solar panels; and if he will make a statement on the matter. [21988/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they are exempt from VAT or fall within Annex III of the Directive, in which case lower VAT rates may apply subject to certain rules.

From 1 May 2023, and in accordance with the Directive and Irish legislation, the supply and installation of solar panels on or adjacent to immovable property, being private dwellings, is subject to the zero rate of VAT. For the zero rate to apply, both the supply of the solar panels and their installation must be the responsibility of the same business in the same supply (i.e. a supply and install contract).

The zero rate of VAT does not apply in situations that do not involve a supply and install contract, such as where panels are purchased, and the installation is carried out by the purchaser or is separately contracted to another party. Also, the zero rate does not apply where the supply and installation is not on or adjacent to private dwellings.

The standard rate of VAT, currently 23%, applies to solar panels if they are provided on a supply-only basis. The reduced rate of VAT, currently 13.5%, may apply to the installation of solar panels if there is a separate installation contract; however, if the cost of any goods provided in the course of the installation contract exceeds two-thirds of the total contract price, then the rate which applies to the goods, in this case 23%, will apply to the entire transaction.