Defibrillators, other than implantable defibrillators, are liable to VAT at the standard rate, which in Ireland is 23%. Parts or accessories are also liable to VAT at the standard rate. There is no provision under existing VAT law that would make it possible to apply a reduced rate or zero rate to the supply of such products. Under the EU VAT Directive, Member States may retain the zero rate on goods and services which were in place on 1 January 1991, but cannot extend the zero rate to new goods and services. As such a zero rate cannot be applied to defibrillators. Any changes to VAT rates outside of what is currently permitted by the EU VAT Directive must be negotiated at EU technical working groups and ultimately agreed by the EU Council of Finance Ministers.
The EU Commission published a proposal on the reform of VAT rates in January 2018 which would allow Member States more flexibility in how they apply VAT rates. In negotiations leading up to this proposal Ireland specifically recommended to the Commission to include defibrillators and other emergency-medical and rescue equipment. Discussions on the proposal are ongoing, having last been discussed in March 2020.
In advance of any change that might be made at EU level to the VAT rating of defibrillators and other products that pose difficulty for community groups, I am happy to draw your attention to the VAT compensation refund scheme, which compensates charities for the VAT they occur on their inputs, in recognition of the work undertaken by the charities sector. The scheme took effect from 1 January 2018 but is paid one year in arrears. It is now open for charities to make a claim in 2020 for VAT costs arising in 2019. Charities will be entitled to a proportion of VAT based on the level of non-public funding they receive. A capped fund of €5 million will be available to the scheme.
The Government is very committed to supporting community groups and we will continue to press for a reduction in the VAT rate on defibrillators at EU level. In the meantime, Irish VAT law must comply with the current VAT Directive and therefore defibrillators remain liable to VAT at the standard rate, currently 23%.
