Dáil Éireann Debate, Wednesday - 20 March 2024
233. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if consideration will be given to introducing similar tax exemptions for petrol purchased by fishermen as is available when they purchase marine diesel. [12091/24]
View answerIreland’s excise regime for fuel is governed by European Union law as set out in Directive 2003/96/EC, commonly known as the Energy Tax Directive (ETD). The ETD prescribes minimum tax rates for fuel with which all Member States must comply. Finance Act 1999 provides for the application of excise duty, in the form of MOT, to specified mineral oils, such as petrol, diesel, and kerosene, that are used as motor or heating fuels.
With regard to mineral oils used for commercial sea navigation, the ETD mandates that such use is exempt from taxation. In line with the ETD, mineral oils used for commercial sea navigation, including sea-fishing, are exempted from MOT by section 100(2)(a) of Finance Act 1999 (as amended). This means that all mineral oils, including petrol, used for commercial sea navigation are exempt from MOT.
I am advised by Revenue that a guide to commercial sea navigation reliefs is available at www.revenue.ie/en/tax-professionals/tdm/excise/mineral-oil-tax-and-carbon-charges/mineral-oil-manuals/commercial-sea-navigation-relief-guide.pdf.
Details on how MOT paid on mineral oils used for commercial sea navigation may be reclaimed using Revenue’s online e-Repayments Claims Facility are available at www.revenue.ie/en/online-services/support/documents/help-guides/mineral-oil/form-1131.pdf
In relation to VAT, the tax treatment of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In accordance with the EU VAT Directive, fishers can elect whether or not to register for VAT in respect of their fishing business, and this affects how VAT incurred on their inputs (such as the purchase of marine diesel or petrol) is treated.
VAT registered fishers are entitled to reclaim VAT on marine diesel. However, VAT on petrol is not deductible by VAT registered businesses (including fishers) except where the petrol is purchased as stock-in-trade of the business (e.g. a petrol station).
Many fishers do not elect to register for VAT and therefore they are not entitled to recover VAT incurred on their inputs. However, VAT unregistered fishers may be able to claim a repayment of VAT paid on the purchase or importation of marine diesel for use on a registered sea-fishing vessel, under the Value-Added Tax (Refund of Tax) (no. 16) Order,1983. The refund order does not provide for a refund of VAT incurred on petrol and it is not possible under EU law to widen the scope of the order.
