Dáil Éireann Debate, Tuesday - 14 May 2024
234. Deputy Darren O'Rourke asked the Minister for Finance if there are plans to change the way VAT is applied to licenced taxi vehicles that are rented; and if he will make a statement on the matter. [21349/24]
Amharc ar fhreagraI am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate unless they are exempt from VAT or fall within Annex III of the Directive, in which case lower VAT rates may apply subject to certain rules. Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%.
The Directive also allows for historic VAT treatment to be maintained under certain conditions; Ireland has retained the application of an exemption from VAT on the transport of passengers and their accompanying baggage and the application of a reduced rate, currently 13.5%, to the supply of hiring vehicles, including vehicles used for taxi services for a short period of time (no more than 5 weeks). The supply of hiring a vehicle for longer periods is subject to VAT at the standard rate, currently 23%.
There is no discretion under the Directive for Ireland to extend the application of the VAT exemption or the reduced rate of VAT to the long-term hire of vehicles, including vehicles used for taxi services.
