Paul Kehoe (Wexford, Fine Gael)
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254. To ask the Minister for Finance if the deposit return scheme will be subject to VAT; and if he will make a statement on the matter. [29710/23]

Michael McGrath (Cork South Central, Fianna Fail)
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As the Deputy will be aware the planned ‘go-live’ date for the operation of the Deposit Return Scheme (DRS) is February 2024.

The appropriate VAT treatment for the scheme has been considered and discussed with the European Commission. I intend to amend the VAT Consolidation Act 2010 in Finance Bill (no.2) 2023 to set out the operating principles of the scheme along with a Regulation, which will set out the detail.

The intention is for only the first taxable person in a supply chain charging a DRS deposit to have to account for VAT on unredeemed deposits. No other businesses further along the supply chain, such as wholesalers and retailers, will account for VAT on deposits at any point. Producers will calculate the VAT due on unreturned deposits based on their total DRS sales less DRS returns.

This non-taxation approach is in line with the VAT Directive and with the principles of the proposed Deposit and Return Scheme.