Dáil Éireann Debate, Wednesday - 8 May 2024
159. Deputy Noel Grealish asked the Minister for Finance if he will help Ireland reduce carbon emissions and encourage a modal shift by reducing the tax applicable to e-bikes and other relevant modes of transport that decarbonise the sector; and if he will make a statement on the matter. [20875/24]
View answerI 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 are exempt from VAT or fall within Annex III of the Directive, in which case lower VAT rates may apply subject to certain rules. Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%.
The Deputy should note while I did give the matter some consideration, no decision was made in Budget 2024 to reduce the VAT rate on bicycles and ebikes. Further consideration can be given to this matter as part of the annual Budget process for in Budget 2025.
However the Deputy may wish to note that on the basis of Annex III, Ireland applies a reduced rate, currently 13.5%, to the supply of hiring bicycles, including e-bikes for a short period of time (no more than 5 weeks); hire for longer periods is subject to VAT at the standard rate of 23%.
