Dáil Éireann Debate, Wednesday - 22 October 2014
47. Deputy Aengus Ó Snodaigh asked the Minister for Finance if water is now considered a utility and has a tax exemption; the reason there is no tax exemption for other utilities such as electricity, gas and so on. [40490/14]
View answerIrish Water is described as the national water utility. The Water Services (No.2) Act 2013 refers to "the public utility nature of its functions".
In recognition of the new charging regime for the provision of water supplies, I announced in the Budget that I would provide tax relief at the standard rate of 20% on water charges paid up to a maximum of €500, resulting in a maximum potential relief of up to €100 per household per annum.
Water is differentiated from other utilities in Ireland, by virtue of the fact that the supply of water by local authorities and Irish Water is also exempt from value-added tax. This VAT exemption is based on a derogation from EU VAT which provides that we can exempt the supply of water, as it has been exempt since 1978. It is worth pointing out that most EU Member States charge VAT on the supply of water.
While there is no tax exemption for other utilities, the supply of gas, electricity and other domestic fuels is chargeable at the reduced VAT rate of 13.5% in Ireland under a separate EU VAT law derogation.
Given the special circumstances that apply to the supply of water, the provision of some relief for water charges has merit. In this regard, my officials are working closely with their colleagues in the other relevant Departments and Agencies, in the development of the operational processes that will be employed to deliver the relief.
