Section 960EA of the Taxes Consolidation Act 1997 provides that transaction costs incurred in respect of the necessary service providers for credit card transactions, i.e. merchant acquirer services and technical connection support can be passed to the taxpayer.
The Revenue Commissioners has advised me that the biggest portion of the current 1.1% charge applied to credit card transactions relates to the costs imposed, on Revenue, by these service providers, which are not covered by the EU payment services directive. It is also important to note that the new EU legislation only relates to domestic or intra-EU consumer credit cards. It does not include any commercial or international credit cards, which are often used for tax payment.
Revenue has confirmed that it reviews the transaction charge in February each year, to ensure it is reduced to the greatest extent possible. Over the last number of years the charge has been reduced from 1.69% to 1.49% and to its current rate of 1.1%. The charge will be reviewed in the coming weeks and any possible reductions, including in the context of the EU payment services directive, will be passed on to taxpayers.
Finally, Revenue has confirmed that it does not charge any fees in respect of debit cards, which are by far the most popular card payment option.