asked the Minister for Finance the rate of VAT on Irish produced craft goods; and if he will consider exempting such goods in order to encourage their production.
Written Answers. - VAT Imposition.
12.
No particular rate of VAT is charged on Irish produced craft goods as such. The rate of VAT applying to craft goods, wherever produced, is determined by the rate applying to the broad categories into which they fall. Thus items coming under the personal clothing heading, however produced, are zero-rated, while items such as jewellery and glassware are chargeable at the 25 per cent standard rate.
It would not be possible or appropriate to apply a special low rate of VAT to Irish craft goods, since traders would often be unable to distinguish between goods for VAT purposes on the basis of the method of manufacturing employed; the same rate of VAT must apply to similar goods whether produced at home or abroad; expenditure on craft goods is normally more discretionary than on many items chargeable at the 25 per cent rate such as furniture and furnishings; the direct revenue loss would not be warranted; and, EEC law precludes the extension of zero-rating to new categories of goods. Where exported by the seller, however, the zero-rate of VAT applies to goods generally.
20.
asked the Minister for Finance why VAT at the rate of 25 per cent is applied to fire-fighting equipment.
All goods are chargeable to VAT at the rate of 25 per cent except where there is provision for a lower charge. Thus, for example, the zero rate applies to most personal clothing, and the 10 per cent rate to goods normally chargeable to excise duty. Consequently, clothing used in connection with fire-fighting is zero-rated and fire engines and hoses are liable at the 10 per cent rate. Other fire-fighting equipment, like most equipment in use in the home or in commercial premises, attracts the standard 25 per cent rate, which, of course, may be reclaimed in the case of VAT registered businesses.