Dáil Éireann Debate, Thursday - 13 March 2014
45. Deputy Robert Troy asked the Minister for Finance if he will revise the current VAT and duty tax on diesel to assist commercial transport companies who are currently finding it difficult to sustain business due to the considerable hikes in fuel costs; if he will consider offering them a rebate system similar to that available to airline and ferry companies; and if he will make a statement on the matter. [12485/14]
View answerThe Energy Tax Directive obliges all Member States to exempt jet fuel used by airlines and fuel used by shipping in Community waters from duty, but does not allow for a similar exemption to be applied to fuel used by road transport operators. The Directive does, however, allow Ireland and other Member States to give a rebate on diesel used by road transport operators and I introduced the Diesel Rebate Scheme last year on that basis. That scheme enables qualifying transport operators to claim a repayment of part of the mineral oil tax paid on auto-diesel purchased in the State for use in qualifying vehicles in the course of business. The amount of the repayment will vary in accordance with the average price at which auto-diesel is available for purchase in the State during a repayment period, subject to a maximum of 7.5 cent per litre. The rate applicable for the current claim period, i.e. from October to December 2013, is 6.2 cent per litre.
The rate of duty per 1,000 litres applicable on auto diesel in Ireland is €479.02, compared to €674.15 in the UK, €561.46 in Sweden, €617.40 in Italy, €477.75 in the Netherlands and €451.45 in Denmark. The average retail price for auto diesel in Ireland, before the diesel rebate is applied, is €1.47 per litre (VAT inclusive). This compares to the average price (VAT inclusive) of €1.67 per litre of diesel in Northern Ireland, €1.63 and €1.68 per litres in Sweden and Italy respectively, and €1.51 per litre in the Netherlands, €1.45 in Denmark.
Commercial transport companies such as hauliers, should be registered for VAT and are permitted to deduct the VAT charged to them on the purchase of business inputs, including auto diesel. Irish VAT legislation must comply with the EU VAT Directive. There is no scope in VAT law to reduce the VAT rate on road diesel to a rate lower than the standard rate, currently 23%.
