Dáil Éireann Debate, Tuesday - 21 October 2014
207. Deputy Shane Ross asked the Minister for Finance the reason professional band musicians have to pay such a large proportion of their relatively small earnings on income tax and VAT; and the reason the VAT threshold is set at €37,500 when in the United Kingdom that VAT threshold is equal to €103,000. [39776/14]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the annual turnover threshold for VAT registration depends on the nature of the business carried out. Ireland operates two thresholds: the goods threshold, which is currently €75,000, and the services threshold, which is €37,500. In general, a person or company who supplies services, such as musician services, must register and account for VAT where their annual income exceeds the services threshold of €37,500.
VAT is governed by EU VAT law, with which Irish VAT law must comply. The EU VAT Directive provides that VAT exemption limits may only be raised in line with inflation, and as such, under EU VAT law it would not be possible to raise Ireland's VAT exemption threshold to the UK level of Stg £81,000. I would point out, however, that the Irish VAT exemption for small enterprises supplying services is the seventh highest in the EU while our goods threshold is the third highest. The UK VAT registration threshold is the highest such exemption in the EU.
For income tax purposes the income earned by a professional musician is treated in the same manner as income earned by any other taxpayer.
