Dáil Éireann Debate, Thursday - 8 September 2022
435. Deputy Pearse Doherty asked the Minister for Finance the estimated cost of applying a zero-rate of VAT to non-oral medicines, disaggregated by non-oral medicine type; if zero rates can be applied to individual non-oral medicine types; and if he will make a statement on the matter. [44352/22]
Amharc ar fhreagraI am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate from VAT. Within its rates structure, the EU VAT Directive also allows for historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III. Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%. Ireland is also permitted to retain some historic VAT arrangements, under strict conditions.
Ireland has retained its historic application of the zero rate of VAT to the supply of oral medicines. In accordance with Irish VAT legislation, oral medicines (for human consumption) which are licensed/authorised by the Health Products Regulatory Authority are liable to VAT at the zero rate however, non-oral medicines (products such as injections and infusions) are liable to VAT at the standard rate, currently 23%.
As traders are not required to identify the VAT yield generated from the supply of specific services or goods on their VAT returns, it is not possible to provide an accurate costing for the potential measures as outlined. However, a tentative estimate using the most currently available third-party data for the cost of zero rating non-oral medicines (currently subject to the standard rate of VAT at 23%) is in the region of €142m.
