Michael Ahern
Ceist:33 Mr. M. Ahern asked the Minister for Finance if he will grant an exemption from VAT to old age pensioners on the purchase and installation of house alarms. [5572/96]
Written Answers. - House Alarm VAT Exemption.
The Deputy may be aware that, in my Budget Statement on 23 January, I indicated that I intend to introduce an income tax allowance of up to £800 at the standard rate, for individuals aged 65 or over living alone, for the purchase of security alarm systems. The relief will remain in force for two years.
With regard to VAT, the position is that EU VAT law, with which Irish law must comply, would rule out exemption, zero rating or the reduced rating of such items for old age pensioners or, indeed, any other categories and, accordingly, the standard rate of 21 per cent must continue to apply.
However, I would point out that the installation of security appliances and alarm systems, would normally be regarded as work on immovable goods (building) which, in accordance with an option provided under EU VAT law, is subject to the reduced rate of 12.5 per cent. The reduced rate would apply to the full cost of installation, subject to the rule that the VAT exclusive value of the goods does not exceed two thirds of the VAT exclusive charge to the customer.