Seán Canney (Galway East, Independent)
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125. To ask the Minister for Finance if he will legislate to ensure that all electric buses purchased to provide transport through Local Link are exempt from VAT; and if he will make a statement on the matter. [25470/23]

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. Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%.

As part of the historic VAT arrangements, Ireland is permitted to retain its exemption from VAT for the transport of passengers and their accompanying baggage. Consequently, there is no VAT charge on the provision of passenger transport through Local Link or other passenger transport providers. However, the supply of electric buses is not included in any of those categories of goods or services therefore a VAT exemption is not permitted. The supply of electric buses is subject to the standard rate of VAT, currently 23%.