Dáil Éireann debate -
Thursday, 29 Oct 1992

Vol. 424 No. 6

Written Answers. - Photographic Film Sales.

Ivor Callely

Question:

58 Mr. Callely asked the Minister for Finance if his attention has been drawn to the fact that photographic films given away free by processing laboratories have a zero VAT rate and films sold in retail outlets have a 21 per cent VAT rate; and if he intends to address this matter.

Minister for Finance (Mr. B. Ahern)

Sales of photographic film by VAT-registered traders are liable to VAT at the standard 21 per cent rate. However, while, in general, a VAT liability arises in the case of goods disposed of free of charge, this provision does not apply to gifts which cost the donor less than £15.

Films supplied free as part of a processing offer are treated under this gifts provision. To the extent that the processing charge includes an element to cover the cost of the "free" film, this will attract VAT. I am, therefore, satisfied that the practice of giving free films does not infringe VAT law.

Photographic processing is currently liable to the 16 per cent rate, and, in line with EC agreements on the VAT rating structure to apply in the Single Market, this service is destined for eventual standard rating.