Written answer
Fuel Prices
Deputy William Aird sought reduced VAT rates on wood fuels and qualifying biomass heating systems to lower household costs and support domestic producers. The Tánaiste declined to comment ahead of Budget decisions, noting EU VAT rules, the existing 13.5% rate on solid fuels, and that reductions cannot favour domestic products or guarantee savings for consumers.
33. Deputy William Aird asked the Tánaiste and Minister for Finance if he will assess the potential impact of a reduction in the VAT rate on wood fuels on domestic producers and suppliers, including businesses operating in County Laois; and if he will consider the benefits such a measure could provide for household heating costs, rural employment and the development of Ireland's domestic biomass supply chain. [67446/26]
Comment on this
34. Deputy William Aird asked the Tánaiste and Minister for Finance if he will review the current 23% VAT rate applying to wood-fuel heating appliances, including qualifying wood-burning stoves and biomass boilers; and if he will examine the potential for applying the 9% second reduced VAT rate to the supply and installation of qualifying wood-fuel heating systems, in line with the existing treatment of low-emission heat pump heating systems. [67445/26]
Comment on this
35. Deputy William Aird asked the Tánaiste and Minister for Finance if his Department has assessed the impact on household heating costs of the current 13.5% VAT rate applying to wood fuels, including pellets and firewood; and if he will examine whether a reduction to the 9% rate would assist households using biomass heating while also supporting the domestic wood-fuel supply chain. [67444/26]
Comment on this
36. Deputy William Aird asked the Tánaiste and Minister for Finance if he will consider reducing the rate of VAT applicable to wood fuels, including wood pellets, firewood and woodchip, from 13.5% to 9% and if he will examine the potential for aligning the VAT treatment of wood fuels with other domestic heating energy sources. [67443/26]
Comment on this
I propose to take Questions Nos. 33, 34, 35 and 36 together.
As the Deputy should be aware, it is long-established practice that the Minister for Finance does not comment on any taxation matters, including the setting of rates, that may be subject to Budget decisions.
I am also advised that the VAT rating of goods and services are subject to the terms of the EU VAT Directive. Generally, it is held that all goods and services are liable for VAT at the standard rate, unless they are included in a list of categories under Annex III of the Directive, in which case a reduced rate or exemption may be applied. Currently, Ireland has a standard rate of 23% and two reduced rates of 13.5% and 9%. A reduced rate of 13.5% already applies to firewood and other solid fuels.
It should be noted that lower VAT rates cannot be applied to only domestically produced renewable and sustainable fuel. In the application of VAT rates, the Directive does not provide discretion for Member States to consider the degree to which goods or services are sourced domestically or are sourced from other countries, nor does it allow different VAT rates to apply to goods depending on whether they are produced here or are brought into the State from elsewhere.
Finally, the Deputy should note that as with other VAT rate reductions, while the VAT charged must always be correct a company can increase the base price of a product so that the final consumer does not benefit from the VAT reduction.