I am informed by the Revenue Commissioners that the service provided by personal insolvency practitioners does not qualify for exemption in accordance with the EU VAT Directive, Irish VAT law, and relevant decisions of the European Court of Justice. Therefore, like other insolvency services such as those provided by liquidators, receivers and examiners, the service provided by a personal insolvency practitioner is liable to VAT at the standard rate of 23%.
I am also informed by the Revenue Commissioners that under a personal insolvency arrangement, the personal insolvency practitioner’s fees are ultimately deducted from the dividend payments to the creditors under the arrangement rather than charged to the debtor. As the debtor is availing of a personal insolvency arrangement because of their insolvent position, it is the creditor who is bearing the ultimate cost of the fees and the VAT on the fees.
Since information is not available on the volume of personal insolvency practitioner activity or the fees charged, it is not possible to estimate the cost to the Exchequer of exempting the service from VAT were it possible to grant such an exemption.