Dáil Éireann Debate, Thursday - 17 November 2022
152. Deputy Colm Burke asked the Minister for Finance if consideration will be given to removing VAT from the supply and installation of solar panels to assist those who wish to be more eco-friendly; and if he will make a statement on the matter. [57061/22]
Amharc ar fhreagraThe 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 (currently 23% in Ireland), unless they fall within the categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT.
Following amendments to Annex III of the VAT Directive, agreed in April 2022, it now includes a category for "the supply and installation of solar panels on and adjacent to private dwellings, housing and public and other buildings used for activities in the public interest." Outside of the above category in Annex III, the supply of solar equipment, is liable to VAT at the standard rate, currently 23%.
I have decided not to make any change to this rate because of the fact that when solar panels are supplied as part of a “supply and install” contract, they may be subject to VAT at the reduced rate of 13.5%. A “supply and install” contract is where installation services are provided in conjunction with goods such as solar panels. As a result, if solar panels are supplied as part of a “supply and install” contract, then the contract may be subject to VAT at the reduced rate of 13.5%, provided that the value of the goods supplied does not exceed two thirds of the total value of the contract. I believe the reduced rate applied in these circumstances is sufficient.
