Dáil Éireann Debate, Tuesday - 12 July 2022
312. Deputy Catherine Connolly asked the Minister for Finance the engagement that he has had with regard to applying a reduced VAT rate for the supply of services by writers, composers and performing artists or of the royalties due to them in budget 2023; and if he will make a statement on the matter. [37189/22]
View answer313. Deputy Catherine Connolly asked the Minister for Finance the analysis that his Department has carried out on applying a reduced VAT rate for the supply of services by writers, composers and performing artists, or of the royalties due to them, in budget 2023; and if he will make a statement on the matter. [37190/22]
View answerI propose to take Questions Nos. 312 and 313 together.
As the Deputy will be aware, it is a long-standing practice of the Minister for Finance not to comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
However, the Deputy should note that section 7 of Annex III of the VAT Directive provides that the reduced rate of VAT may be applied by Member States to admission to, among other things, cinemas, theatres and concerts. However 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 and charge 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 to the supply of services by writers, composers or performers. Section 9 of Annex III provides that 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 services supplied to a VAT-registered business is already deductible by the recipient of the supply, under the normal VAT rules.
