Dáil Éireann Debate, Tuesday - 15 June 2004
176 Mr. Ring asked the Minister for Finance if he will consider changing the legislation pertaining to rescue craft so that the VAT and fuel relief applicable to seafaring rescue crafts will also be relevant to rescue craft operational on fresh water bodies such as lakes, rivers and so on; the plans his Department has to address this anomaly in the legislation; and if he will make a statement on the matter. [17691/04]
View answerI am advised by the Revenue Commissioners that section 100(1)(h) of the Finance Act 1999 allows relief from mineral oil tax on “mineral oil which is intended for use or has been used as fuel for the purpose of sea navigation, including sea fishing, other than in private pleasure craft”.
Since the craft referred to by the Deputy are for use on inland waterways, the fuel they use does not qualify for this excise relief. I have currently no plans to amend the legislation to provide for such relief because there are concerns regarding the potential difficulties in controlling such a scheme and also the likely negative impact on tax yields.
Regarding the question of VAT and rescue craft also raised by the Deputy, the Value Added Tax (Refund of Tax) (No.18) Order, 1985, provides for the repayment of VAT costs incurred in respect of equipment for use only in respect of rescue or assistance at sea. The order does not extend to fuel in respect of seagoing rescue craft or to fuel or equipment used in rescue craft operational on fresh water bodies.
I have no plans to extend the VAT repayment arrangements for equipment used in rescue at sea to that used by rescue craft operating in fresh water bodies or to introduce such an arrangement facilitating a refund on VAT incurred on fuel costs. Practical difficulties in distinguishing the intended use of such equipment and fuel and the potential costs to the Exchequer are my main concerns in this regard.
However, the Deputy may be aware that the VAT legislation provides for zero-rating of "life saving services provided by the Royal National Lifeboat Institution, including the organisation and maintenance of the lifeboat service". This means that while the RNLI do not charge VAT on the services they provide, they are entitled to reclaim VAT incurred on the goods and services which they purchase in delivering their services.
In addition, the Irish Coast Guard, under the aegis of the Department of Communications, Marine and Natural Resources, administers the community inland and inshore rescue services grant scheme. The Community of Inshore Rescue Services and the Inland Rescue Service may apply for grants under the scheme in respect of both current and, more recently, capital expenditures. Guidelines on the scheme in terms of eligibility criteria and grant levels are available from the Irish Coast Guard. I hope this clarifies the position regarding excise and VAT reliefs in respect of equipment and fuel used by rescue craft.
