Dáil Éireann Debate, Tuesday - 24 May 2016
111. Deputy Michael Fitzmaurice asked the Minister for Finance to change the value added tax status on bus transport operators to a zero rate rather than an exempt status to enable them to reclaim value added tax payments, as part of a programme to incentivise the use of public transport. [11524/16]
Amharc ar fhreagraI am advised by the Revenue Commissioners that the transport of passengers and their accompanying baggage is exempt from VAT in Ireland under paragraph 14(3) of Schedule 1 to the VAT Consolidation Act 2010 as amended. Therefore, the services of bus transport operators are exempt from VAT. Persons whose services are exempt from VAT are not required to register for VAT or charge VAT on the supply of their services.
While persons who are VAT exempt cannot recover any VAT incurred on goods and services incurred in relation to their business such as fuel, tyres and mechanic charges, there is a special provision within the VAT code to allow a refund of VAT incurred on the purchase of touring coaches. Under VAT Refund Order SI. 266 of 2012 coach operators who are exempt from VAT may, subject to the conditions in the Order, be entitled to a refund of the VAT paid on the purchase of touring coaches that are no more than 2 years old and are within specified dimensions.
It is not possible under EU law for Ireland to apply a zero rate to the services of private bus operators.
