Terence Flanagan
Question:61. Deputy Terence Flanagan asked the Minister for Finance his plans to abolish VAT on standing charges for utility services; and if he will make a statement on the matter. [36206/14]
View answerThursday, 25 September 2014
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Section 37(1) of the Value-Added Tax Consolidation Act 2010 provides that the amount on which VAT is chargeable is the total consideration which the person supplying the goods or services becomes entitled to receive in respect of that supply, "including all taxes, commissions, costs and charges whatsoever", but not including the VAT itself. This reflects EU VAT law, with which Irish tax law must comply. In this regard, Article 78 of the EU VAT Directive provides that the taxable amount shall include "taxes, duties, levies and charges, excluding the VAT itself". In this regard, standing charges for utility services are legally liable to VAT. The carbon tax element of a gas bill or the public service obligation levy element of an electricity bill is also subject to VAT.
I would point out, however, in Ireland the supply of electricity and gas is subject to the 13.5% reduced VAT rate, where most other EU Member States apply a much higher standard VAT rate to these supplies.