Wednesday, 13 November 2019

Ceisteanna (72)

Denis Naughten

Ceist:

72. Deputy Denis Naughten asked the Minister for Finance the reason for the difference in the VAT registration threshold for the sale of services versus the sale of goods; if he will review the anomaly; and if he will make a statement on the matter. [46497/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

I am advised by Revenue that VAT is governed by the EU VAT Directive (Council Directive 2006/112/EC), with which Irish VAT law must comply.

There is no anomaly to be reviewed. Article 284 of the Directive permits Ireland to maintain two thresholds - €75,000 for goods and €37,500 for services - and only permits an increase in these thresholds to maintain their value in real terms, that is they may only be increased in line with inflation and for no other reason. Ireland could have one threshold, but that threshold would have to be the lower one of €37,500.

The distinction between the supply of goods and the supply of services is a feature of the EU VAT Directive and Irish VAT legislation. The value added in relation to a supply of a good is the difference between the purchase price and the sale price, while the value added in the supply of a service will generally be a much higher percentage of the price charged and involve a significant direct input by the business proprietor or his or her employees.