Gerald Nash (Louth, Labour)
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237. To ask the Minister for Finance if his Department is aware of concerns around VAT liabilities in an industry (details supplied); if his Department and the Revenue Commissioners have given any consideration to an approach taken to this matter by the national tax authority in another EU Member State; and if he will make a statement on the matter. [33270/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that VAT is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply. Irish VAT legislation, in compliance with EU VAT law provides that taxable persons who are receiving services from outside the State, in the course of their business, are accountable and liable to pay VAT on?the reverse charge basis. This provision applies to businesses across all sectors, including taxi drivers, who receive services from abroad, irrespective of their value.

Accordingly, when a business outside Ireland provides services to taxi drivers in the State, the reverse charge rules apply. This means the Irish taxi drivers who are customers of that business are obliged to self-account for the VAT in the State on the supply of the services they have received. Taxi drivers may not already be registered for VAT, because the provision of passenger road transport services is VAT exempt in Ireland; in such case, the taxi driver is required to?register?so that they can account for Irish VAT on the received services.

The Deputy compares some recent Revenue data about VAT registrations recorded with the NACE code specific to taxi-driving, with public reports of a larger number of taxi drivers here receiving services from a platform abroad. The difference in numbers may arise for various reasons. For example, as indicated in the Revenue registrations data, taxi drivers who have additional business interests may hold VAT registration recorded with the NACE code attributable to those sectors, and others who were in a different business prior to commencing taxi driving may not have amended their record to reflect the taxi NACE code.

Revenue operates a self-assessment system for VAT and therefore the application of VAT on services is primarily a matter for the company or person who is accountable for the VAT. In line with its focus on providing a service to support taxpayer compliance, Revenue provides extensive guidance in relation to VAT on services on its website www.revenue.ie and in the form of various Tax and Duty Manuals. Revenue will also provide specific advice or guidance to taxpayers that seek VAT advice on services through contact with the relevant Revenue branch or through its Revenue Technical Service. To further support compliance specifically in the taxi sector, Revenue published a detailed guidance document in February 2025 explaining how the VAT rules apply to taxi businesses and how to comply with the requirements. This Tax and Duty Manual on the VAT Treatment relevant to Taxi drivers can be accessed on the Revenue website www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Services/vat-treatment-of-taxi-drivers.pdf.

Alongside supporting tax compliance, Revenue also addresses non-compliance. In operating the self-assessment system for VAT, Revenue monitors tax compliance through a range of risk identification, assessment and evaluation programmes, together with processes that are supported by real-time data analytics and the interrogation of both taxpayer and third-party information. This approach enables Revenue to identify and quantify risk, ensuring that compliance resources focus on the non-compliant taxpayer, minimising the administrative burden on the compliant taxpayer. Revenue’s ongoing annual compliance programmes focus on multiple risk areas and a wide range of business sectors which includes, but is by no means limited to, taxi drivers and those providing passenger transport.

The Deputy refers to the tax clearance required when applying for a Small Public Service Vehicle Licence from the National Transport Authority. Tax clearance is confirmation from Revenue that a taxpayer’s affairs are in order. If an individual’s tax affairs (or those of a connected party) are not in order, tax clearance may be refused or rescinded. Where tax clearance is rescinded, or an application for tax clearance is refused, the reasons for same will be outlined and these issues should be addressed before re-applying for tax clearance. Further information on tax clearance is available at www.revenue.ie/en/starting-a-business/tax-clearance/tax-clearance-under-review-refused-or-rescinded/application-refused.aspx.

The Deputy suggests requiring suppliers of certain services from outside the State to register here for VAT in order that their taxi-driver customers here would not have VAT obligations under the reverse charge. I am advised by Revenue that there is no discretion under the EU VAT Directive for Ireland to require VAT registration here by businesses who are not established in the State and who supply services to businesses in the State. Revenue does not comment on the tax administration of other Member States.