Phil Hogan
Question:38 Mr. Hogan asked the Minister for Finance the legal basis by which Bord Telecom can charge VAT on telephone rental as well as telephone calls; and if he will make a statement on the matter.
Written Answers. - Bord Telecom VAT Charges.
The position is that, in line with EU requirements, sections 2 and 10 of the Value-Added Tax Act, 1972, (as amended) lay down the principle that VAT is chargeable on the full consideration received by taxable persons in respect of supplies of goods and services made in the course of business. In this context the rental of hire of goods is regarded as being a taxable service. Except where the VAT Act specifically provides for exemption or for the application of a reduced rate of VAT, all supplies of goods and services are liable to VAT at the 21 per cent rate. It is on this basis that the rental of telephone equipment is liable to VAT at the 21 per cent rate. This is also the basis for the charge of VAT on telephone calls.