Dáil Éireann Debate, Tuesday - 14 November 2006
239 Mr. Kenny asked the Minister for Finance the extent of loss of revenue generation in this jurisdiction due to the different rate of VAT applicable in Northern Ireland on renewable energy products; his views on whether this variation is a source of loss of job investment and economic return for companies attempting to compete with this; and if he will make a statement on the matter. [37476/06]
View answerI am informed by the Revenue Commissioners that it is not possible to furnish figures for the VAT take on renewable energy products, as the information furnished on VAT returns does not require the yield from particular goods or sectors of trade to be identified.
In terms of the scope for reducing VAT rate on renewable energy products the position is that the VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply. The supply of all fuel products used for home heating and light are therefore subject to the reduced VAT rate of 13.5% under Article 28 (2e) of the Sixth VAT Directive. This means that Member States had the option of maintaining, at a reduced rate of not less than 12%, any items not listed in Annex H of the Sixth VAT Directive, provided these items carried a reduced rate on 1 January 1991. Ireland is one of only eight Member States that apply a reduced or parked rate to the supply of fuel products used for home heating and light. In Ireland the parked VAT rate equates to our reduced rate of 13.5%.
The sale of renewable energy systems is chargeable at the standard VAT rate of 21%. However, where the systems are supplied and installed as a single contract, the total charge may be liable to VAT at 13.5 per cent provided the VAT-exclusive cost of the goods to the supplier does not exceed two-thirds of the total VAT-exclusive charge to the customer. In terms of impact on business in the border region, it should also be noted that such supplies are treated as a deductible credit for business.
In relation to domestic use of renewable energy products, I would point out that my colleague Mr. Noel Dempsey, T.D., Minister for Communications, Marine and Natural Resources, recently launched a grant aid scheme of up to €27m for domestic renewable heat technologies. The scheme was agreed in last year's Budget and is part of a multi-annual finance package of €65m for renewable energy that also includes grants for a range of renewable heat, electricity and transport initiatives. The "Greener Homes" scheme allows individual householders, for the first time ever, to obtain grants for the installation of renewable technologies including wood pellet stoves and boilers, solar panels and geothermal heat pumps. Grant aid of €1,100 to €6,500 is being provided depending on the individual technology used.
The scheme is being rolled out over a five year period, and will potentially support the conversion to renewable energy in up to 10,100 homes. By its final year, it is expected to save energy equivalent to 54,000 barrels of oil per annum and 23,000 tonnes of CO2 per annum. This is equivalent to meeting 100% of the heating needs of 7,100 homes from renewable energy, or removing 6,700 cars from the road.
240 Mr. Hayes asked the Minister for Finance if stamp duty is refunded on a second hand house, which is owner occupied for five years or more. [37491/06]
View answerStamp duty is a duty imposed on a conveyance or transfer of certain property and the liability to that duty arises at the time the conveyance or transfer is made. The most common charge to stamp duty which affects individuals is the stamp duty which arises on the conveyance of residential property i.e. houses and apartments. The amount of stamp duty payable depends on: the market value of the property; whether it is or is not second-hand; and whether the purchaser is a first-time buyer, owner-occupier or investor. Stamp duty on second-hand houses is charged to duty at the rates set out in the following Table — i.e. there are different rates for first-time buyers and others.
|
Purchase Price |
Full Rate |
First time buyer rate |
|
€ |
||
|
Less than 127,000 |
exempt |
exempt |
|
127,001-190,500 |
3% |
exempt |
|
190,501-254,000 |
4% |
exempt |
|
254.001-317,500 |
5% |
exempt |
|
317,501-381,000 |
6% |
3% |
|
381,000-635,000 |
7.5% |
6% |
|
Over 635,000 |
9% |
9% |
In respect of second-hand houses/apartments, the only relief that is available is for first-time buyers who are owner-occupiers. They are charged to duty in accordance with the first-time buyer rate set out in the Table above. The relief is given on the basis of the purchaser certifying that he/she will be an owner-occupier of the house/apartment concerned for at least 5 years and is a first-time buyer, but if any rent is received in the first 5 years (other than under the rent a room scheme), the relief will be withdrawn.
Those who are not first-time buyers are liable to duty in accordance with the full rate also set out in the Table. The question of refunding stamp duty on a second-hand house that is owner-occupied for five years or more does not arise.
241 Dr. Cowley asked the Minister for Finance if VAT can be reclaimed on a medical device such as a behind the ear speech processor which can only be purchased outside of the State for a totally deaf person; and if he will make a statement on the matter. [37511/06]
View answerI am informed by the Revenue Commissioners that in accordance with paragraph (xixa) of the Second Schedule to the Value-Added Tax Act 1972 (as amended) the supply of medical equipment and appliances to assist hearing is subject to the zero VAT rate. This would include devices such as cochlear implants. The zero rate of VAT also applies to parts and accessories that are suitable for use solely or principally with deaf aids.
Under the Value-Added Tax (Refund of Tax) (No. 15) Order 1981 repayment may be claimed of the VAT paid on certain special aids and appliances for disabled persons. These are aids and appliances which are specially constructed or adapted for use by a disabled person. Goods which, although not so specially constructed or adapted, are of such a kind as might reasonably be treated as so constructed or adapted having regard to the particular disablement of the person concerned also qualify. The relief is also available in certain circumstances to persons other than disabled persons who purchase such goods for handing over to a particular disabled person.
In relation to question of reclaiming VAT paid in another EU Member State on medical appliances to assist hearing, consumers, who are not VAT-registered persons, are required to pay VAT on goods in that Member State at the appropriate rate. This tax cannot be refunded in this State as it was never paid here. However, the Revenue Commissioners have advised that given the nature of the device referred to by the Deputy, it should be possible to purchase it in Ireland where it would be subject to VAT at the zero rate and that a similar case has recently been resolved in this manner.
