Dáil Éireann Debate, Thursday - 11 March 2010
102 Deputy Joan Burton asked the Minister for Finance the position regarding the application of VAT to e-books; the annual Exchequer revenue derived from the application of VAT on e-books; if he plans to bring forward legislation which would see equal treatment, as regards the application of VAT, between books and e-books; and if he will make a statement on the matter. [12092/10]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the supply of e-books is subject to VAT at the standard rate of 21% when sold by Irish based suppliers to consumers in Ireland or in any other EU Member State. The Irish rate applies also to sales of e-books into Ireland from suppliers outside the EU. However, when an Irish consumer purchases e-books from a supplier in another Member State the VAT rate is the applicable rate in the supplier's Member State.
EU Directive 2008/8/EC contains a provision that deals with the VAT treatment of the supply of electronic services supplied to consumers. It provides that, with effect from 1 January 2015, the place of taxation of these services will change to where the consumer resides. This means that VAT will be chargeable in the consumer's Member State. All business-to-business sales of e-books are already taxed in the business customer's Member State.
VAT returns do not require the yield from a particular sector or sub-sector of trade to be identified and the VAT yield from sales of e-books cannot therefore be provided. Printed books, excluding newspapers, periodicals and certain other printed matter, are subject to the zero VAT rate. Under EU VAT law, Member States may retain the zero rates on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. Consequently, it is not possible to apply zero-rating to e-books.
103 Deputy Noel Ahern asked the Minister for Finance if he will clarify the position in regard to mortgage tax relief or other tax relief on borrowings, specifically, if mortgage relief can be awarded to only one taxpayer on a particular property; if mortgage relief can be awarded in respect of same house to the applicant and their parents who took out a separate €25,000 deposit loan; and if any other tax relief is available to the parents against their loan. [12136/10]
Amharc ar fhreagraThe position is that tax relief — at varying rates and subject to certain ceilings — is available in respect of interest payable on a qualifying home loan. A qualifying home loan is a loan used by an individual in the purchase, repair, development or improvement of his or her principal private residence. On the assumption that the Deputy's Question relates to a scenario wherein the parents took out a loan of €25,000 and used that loan to assist a son or daughter in the purchase of a private residence, then—
(a) if the residence purchased by the son/daughter is the principal private residence of both the parents and the son/daughter (i.e. the parents live with the son/daughter in that residence), then—
(i) the parents may claim tax relief on the interest paid by them on the loan of €25,000; and
(ii) the son/daughter may claim tax relief on the interest paid on the loan taken out by him/her to purchase the residence,
(b) if the residence purchased by the son/daughter is not the principal private residence of the parents but is the principal private residence of the son/daughter, then –
(i) the parents may not claim tax relief on the interest paid by them on the loan of €25,000; and
(ii) the son/daughter may claim tax relief on the interest paid on the loan taken out by him/her to purchase the residence.
Where the parents cannot claim tax relief on the interest paid on a loan used to assist a son/daughter to purchase of a private residence, I am further informed by the Revenue Commissioners that the Income Tax Acts do not provide for any other tax relief in respect of either the loan or the interest paid on that loan.
