Dáil Éireann Debate, Thursday - 14 June 2012
35 Deputy Gerald Nash asked the Minister for Finance the likely cost of the following changes to VAT rates, reducing the VAT rate on services currently charged at 9% to 5%; reducing the VAT rate on certain business services currently charged at 23% to 15%, that is accounting and legal services and reducing the standard VAT rate from 23% to 20%. [28847/12]
View answerI am informed by the Revenue Commissioners that the cost of reducing the VAT rate to 5% on those services currently applying at the 9% reduced rate, is estimated at €330 million. The cost of reducing the standard VAT rate from 23% to 20% is estimated at €850m. With regard to reducing the standard VAT rate on certain business activities from 23% to 15%, this would not be possible under EU VAT law, with which Ireland must comply. The EU VAT Directive provides that Member States may only operate one standard VAT rate. In order to reduce the VAT rate to 15% on accounting and legal services, this would require a general reduction in the standard VAT rate from 23% to 15%. Such a move would cost over €2 billion and is not feasible in the current climate.
