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Tax Reliefs

Dáil Éireann Debate, Wednesday - 6 April 2022

Wednesday, 6 April 2022

Questions (36)

Richard Bruton

Question:

36. Deputy Richard Bruton asked the Minister for Finance if a recent move has been made to apply VAT to candles; if any relief can be made for candles used in religious rites; and if he will make a statement on the matter. [18576/22]

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Written answers

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. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. Ireland, in line with the VAT Directive, also maintains several standstill provisions and derogations that allow it to maintain reduced rates, zero rates and exemptions to certain supplies for historical reasons. These standstill provisions and derogations cannot be extended.

In accordance with one such standstill provision, white (including off-white and cream) cylindrical candles and night-lights were zero rated for VAT purposes. Other candles and night-lights, such as those that are decorated, spiralled, tapered or perfumed, were always liable to VAT at the standard rate.

I introduced an amendment in Finance Bill 2020 to remove the application of the zero rate of VAT to a category of candles and consequently provide for the taxation of all candles at the standard rate of VAT, currently 23%. Following discussions at Committee Stage of the 2020 Bill and having received numerous representations, I decided on a later date for implementing this change on the basis that it would allow the parties involved to amend their pricing and contracts which would already have been set based on the zero rate of VAT. The proposed amendment came into effect on the 1 January 2022 and VAT rate for all candles is the standard rate, currently 23%.

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