Dáil Éireann Debate, Tuesday - 23 November 2004
231 Mr. Sherlock asked the Minister for Finance if there is a proposal to amend an order (details supplied) in view of the fact that it is having a detrimental effect on the delivery of inshore rescue and recovery services. [29947/04]
View answerThis matter has been raised on a number of occasions. The Value Added Tax (Refund of Tax) (No. 18) Order 1985, referred to by the Deputy, 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 equipment used in rescue craft operational on bodies of fresh water. Practical difficulties in distinguishing the intended use of such equipment in the context of craft on fresh water bodies and the potential costs to the Exchequer are the main considerations in this regard. Charities and non-profit groups are exempt from VAT under the EU's sixth VAT directive. This means they do not charge VAT on their services and cannot recover VAT incurred on goods and services that they purchase.
Only VAT registered businesses which charge VAT are able to recover VAT. However, the Deputy may be aware that the Finance Act 1973 provided for the 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 does not charge VAT on the services it provides, it is entitled to reclaim VAT incurred on the goods and services which it purchases in delivering its services. In addition, the Irish Coast Guard, under the aegis of the Department of Communications, Marine and Natural Resources, administers the community of 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.
