Vol. 498 No. 6
56 Mr. Hayes asked the Minister for Finance the reason traditional Chinese medicine, acupuncture and other forms of nonconventional treatments are not recognised within the meaning of paragraph three of the first schedule of the Value-Added Tax Act, 1972, which states that the professional services of a medical nature shall be exempt from VAT, in view of the fact they are medical or paramedical in nature; and if he will make a statement on the matter. [27285/98]
I am informed by the Revenue Commissioners that Paragraph (iii) of the First Schedule of the VAT Act provides for the exemption from VAT of "professional services of a medical nature".
This is in line with the provisions of the EU Sixth VAT Directive with which Irish VAT law must comply.
Article 13A(1)(c) of the directive states that the exemption shall apply to "the provision of medical care in the exercise of the medical and paramedical professions as defined by the member state concerned.".
As the treatments concerned in the Deputy's question are not officially recognised as professional services of a medical nature in the State by either the Department of Health or the governing body of the medical profession, they cannot be treated as exempt activities within the provisions of the VAT Act.
Such treatments do however benefit from the lower rate of VAT of 12.5 per cent, under the Sixth Schedule to the VAT Act, as "services consisting of care of the human body".
Because of this, practitioners who provide such services are entitled to recover VAT incurred on all purchases relating to the provision of such services. This is not the case with practitioners who are exempt from VAT.
