Vol. 525 No. 1
109 Mr. Yates asked the Minister for Finance if he has any plans to review the VAT or taxation code whereby renewable or recycled products would be taxed differently to competing products that do not adhere to the principles of sustainability. [23682/00]
I should explain that VAT is largely governed by EU VAT law with which Irish VAT law must comply. It is possible to introduce reduced VAT rates only in respect of the goods and services listed in annex H of the Sixth EU VAT Directive. None of the goods and services listed in annex H refers to either renewable or recyclable products or provide for differentiation on the basis of this criteria. A change in the annex H provisions would require a proposal from the EU Commission and unanimous agreement from the Council of Ministers.
Therefore, it is not possible to introduce any VAT changes which could differentiate between renewable or recycled products as opposed to competing products which are less sustainable, even should such categories be capable of precise definition. Finally, the Deputy should be aware that any changes along the lines he is suggesting would be subject to scrutiny under state aid rules by the competition directorate of the EU Commission.
