Vol. 475 No. 5
88 Mr. Kirk asked the Minister for Finance if he will outline the reasoning for the different levels of VAT applied to dairy equipment depending on whether the work is undertaken at service company's workshop or on the farm; and if he will make a statement on the matter. [5316/97]
I am informed by the Revenue Commissioners that the following VAT rates apply to the supply of goods and services in relation to dairy equipment: supply of equipment, 21 per cent; supply and installation of equipment regarded as fixtures (e.g. milking parlour equipment), 12.5 per cent; supply and installation of equipment not regarded as fixtures, 21 per cent; repair and installation, in all instances, of dairy equipment, 12.5 per cent.
The rate of tax applying to certain services normally charged at the 12.5 per cent rate of VAT depends on the two-thirds rule. Section 10 (8) (a) of the VAT Act, 1972, as amended refers. This provides that a transaction is liable for VAT as a sale of goods at the 21 per cent rate and not as a service at the 12.5 per cent rate if the value of the goods (that is their cost, excluding VAT, to the service contractor) exceeds two-thirds of the total charge to the customer.
The above outlines the VAT rates that apply in relation to dairy equipment. There should not be inconsistency in the VAT application based on where service work is carried out.
If the Deputy has information relating to such inconsistency, perhaps he would send it to the VAT Administration Branch, Office of the Revenue Commissioners at Dublin Castle, for investigation.
