Dáil Éireann Debate, Tuesday - 21 May 2019
176. Deputy Micheál Martin asked the Minister for Finance if there is a policy regarding VAT on public projects within his Department; if it applies to all Departments; if it is up to each Department to decide themselves; and if he will make a statement on the matter. [21832/19]
View answerVAT is chargeable on supplies made to Public Bodies as a matter of course. In general, public bodies are not taxable persons and their activities are therefore outside the scope of VAT and, therefore, they have no entitlement to VAT deductibility on their inputs even though VAT will have been charged on any invoices issued to them. While the activities of a public body are generally outside the scope of VAT, there are circumstances whereby a public body will be a taxable person in respect of some of its activities and accordingly, those activities will then come within the scope of VAT. Irrespective of the above, public bodies are regarded as taxable persons in respect of certain specific activities where those activities are carried out on a more than negligible scale. Schedule 6 to the VAT Consolidation Act 2010 contains an exhaustive list of these activities and they include Telecommunication services, Supply of water, gas, electricity and thermal energy, Transport of goods, Passenger transport, etc.
The fact that a public body acts in its capacity as a public body when it carries out an activity does not in itself mean that the public body is regarded as a non-taxable person in respect of that activity. To determine the public body’s status as a non-taxable person, it is necessary to carry out a further assessment of the commercial circumstances in which the activity is provided. Regard must be had as to whether the public body is in competition with private operators when it carries out that activity and it will not be treated as a non-taxable person in respect of that activity where to do so would result in a signification distortion of competition.
