Michael Ring
Question:162 Mr. Ring asked the Minister for Finance if he will ensure that any new inventions will not have value added tax applied to the products made for their first three years of production. [12767/01]
Written Answers - Tax Code.
The imposition of VAT is governed by EU VAT law with which Irish VAT law must comply. Under the EU Sixth VAT Directive, member states may retain the zero rates they had in place on 1 January 1991, but they are prohibited from introducing new zero rates. It would not be possible therefore to relieve new inventions of VAT.
New products, when they are sold to consumers may have to be rated for VAT purposes but will be either zero rated, reduced rated, 12.5% or standard rated, 20%. Where a taxable person produces a new invention which is subject to VAT, they can recover the VAT on inputs used in making that invention.