Skip to main content
Normal View

Tax Code

Dáil Éireann Debate, Tuesday - 1 March 2022

Tuesday, 1 March 2022

Questions (252, 267)

Aengus Ó Snodaigh

Question:

252. Deputy Aengus Ó Snodaigh asked the Minister for Finance the circumstances or regulations that allow other European Union member states (details supplied) to apply a reduced or super reduced VAT rate or VAT exemption to the supply of services by writers, composers and performing artists or to the royalties due to them as is permitted under section 9 of Annex III of Directive 2006/112/EC but prohibits this State from implementing a similar reduced or super reduced VAT rate or VAT exemption to the same services by writers, composers and performers here; if Ireland has the right to implement such a reduced or super reduced VAT rate or VAT exemption for the same services but chooses not to implement same; and if she discussed or will discuss with the Minister for Minister for Finance the way such options regarding VAT which are permissible under European Union law could support Irish artists and performers in Ireland. [11001/22]

View answer

Aengus Ó Snodaigh

Question:

267. Deputy Aengus Ó Snodaigh asked the Minister for Finance if Ireland has the right to implement a reduced or super reduced VAT rate or VAT exemption for the supply of services by writers, composers and performing artists or to the royalties due to them, but chooses not to implement same; and if he discussed or will discuss the way such options regarding VAT which are permissible under European Union law could support Irish artists and performers in Ireland. [12023/22]

View answer

Written answers

I propose to take Questions Nos. 252 and 267 together.

I am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. The VAT Directive obliges each Member State to have a standard rate of VAT and also allows that a Member State may choose to have no more than two reduced rates of VAT, which may be no less than 5%, and which may be applied to certain goods and services:  any of those listed in Annex III of the Directive. Within this framework, Ireland currently applies a standard rate of 23% and two reduced rates of 13.5% and 9%. 

Also, within the EU Directive there is provision for derogations from the general rules which allows an individual Member State to continue certain historic tax treatments.  By way of special derogation from the general rule, Ireland maintains several standstill provisions and derogations, including the availability of either an exemption or application of the reduced rate of VAT of 9% to the promotion of and admissions to live musical performances (excluding dances) – the exact VAT treatment depends on whether food or drink is available for consumption.

Under Irish VAT law the supply of services by writers, composers and performing artists are subject to the standard rate of VAT, currently 23%.  The providers of such services are required to register for VAT where their supplies exceed €37,000 per annum, and – in line with normal VAT rules – if the recipients of the services are registered for VAT and use the supplies in the course of their taxable business activities, then the VAT charged on the supply is deductible by the recipient

Under the VAT Directive, there is no provision to permit the introduction of an exemption or what the Deputy refers to as a “super reduced” rate to the supply of services by writers, composers or performers.  Member States may apply a reduced rate to such services;  however, any consideration of this possibility would need to assess the benefit of making such a change – given that the VAT charged on service supplied to a VAT-registered business is already deductible by the recipient of the supply, under the normal VAT rules.  

Decisions about tax changes are generally taken in the context of the Budget and, as part of our normal annual Budget preparations, various options for tax policy changes will be considered by the Tax Strategy Group prior to Budget 2023.

Top
Share