asked the Minister for Finance if he is aware of the serious effect on employment in dental companies caused by the imposition of 23 per cent VAT in the products of such companies such as crown and bridge dentures; that the EC has now issued a directive that such work should be zero rated for VAT; that Ireland is now the only EC country not complying with this directive; if he will incorporate appropriate amendments in the Finance Bill, 1986; and if he will make a statement on the matter.
Written Answers. - Dental Products VAT Rate.
76.
Notwithstanding that dentures and certain other goods supplied by dental companies are zero rated for VAT purposes, I am aware of certain difficulties caused for VAT registered dental companies by their inclusion in the VAT system. The problem stems from competition from their unregistered counterparts and is a problem not specific to this particular trade; it can occur generally in business due to the imposition of registration limits at any given level. Such limits are, however, an indispensable part of the VAT system.
The EC directive referred to is, in fact, only an EC Commission proposal to the Council for an 18th VAT Directive. It has not yet come up for official discussion. If adopted, it will provide, inter alia, that from 1 January 1988 the services of dental technicians and the supply of dental prostheses by dentists and dental technicians must be exempted from VAT (not zero rated) in member states where they are not already so. Three countries including Ireland would be affected by such a change. I will be keeping the matter under review in the light of developments.