Dáil Éireann Debate, Thursday - 16 December 2021
116. Deputy Cathal Berry asked the Minister for Finance the position regarding the application of VAT on motor fuel; the rate for same; if he is considering a reduction in the rate; and if he will make a statement on the matter. [62419/21]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. Under the EU VAT Directive and Irish VAT legislation the supply of motor fuel, specifically petrol and diesel, is liable to VAT at the standard rate, currently 23%.
The Deputy should also note that petrol and diesel are treated differently under Irish VAT law regarding VAT recovery entitlements of VAT-registered taxpayers. VAT-registered businesses are entitled to recover the cost of VAT on the purchase of diesel used in the course of their business, as is the case with most business costs. However, the VAT Consolidation Act provides that VAT on petrol is not recoverable, including by businesses registered for VAT, except where the petrol is purchased as stock-in-trade of the business.
