Seán Barrett
Ceist:115 Mr. Barrett asked the Minister for Finance if he intends to abolish VAT on research periodicals. [21738/97]
Written Answers. - Tax Reliefs.
The situation regarding VAT rates is governed by EU VAT law. Under the EU Sixth VAT Directive, member states may retain the zero rates that they had in place on 1 January 1991, but they are prohibited from introducing new zero rates. As research periodicals were not zero rated at that time, it is not now open to the Government to apply such a rate. Indeed, the introduction of new zero rates has been forbidden for many years.
As regards reduced rating, it would be legally possible under EU VAT law to apply such a rate to research periodicals and I will bear this in mind when the rating structure is next up for review.
However, it should be noted that Irish institutions purchasing these periodicals have the benefit of the zero rating of books which is not generally available in other EU countries. In addition, the level of Exchequer grants to universities and other educational institutions takes into account the fact that, while such bodies are exempt from charging the tax, they must bear VAT on the goods and services which they purchase in the course of their activities.