415. Deputy Carol Nolan asked the Tánaiste and Minister for Finance to examine the way in which a reduction in VAT on home heating oil would off-set the impact on consumers of the increased use of low carbon liquid fuel in home heating, such as HVO. [64740/26]

The EU VAT Directive which Irish VAT law is obliged to comply, generally holds that all goods and service are liable for VAT at the standard rate which Member States must set at a minimum of 15%. Ireland currently charges a standard rate of 23%.

If a good or service is included in a list of goods and services under Annex III of the Directive, a reduced rate of VAT or exemption may be applied. Member States are permitted to apply up to two reduced rates at a minimum of 5%. Ireland currently has two reduced rates of VAT of 13.5% and 9%. Member States may also avail of a derogation under the terms of the Directive that allows for a reduced rate of VAT be applied to specific goods and services that have historically been charged below the standard rate and not included under Annex III.

As home heating oils such as kerosene is not included under Annex III, Ireland has availed of this derogation to charge the reduced 13.5% rate on home heating products. There is no legal basis to apply a further reduction of VAT.