Written Answers - Tax Code.

Wednesday, 22 November 2006

Dáil Eireann Debate
Vol. 628 No. 1

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  82.  Mr. Cuffe  Information on Ciaran Cuffe  Zoom on Ciaran Cuffe   asked the Minister for Finance  Information on Brian Cowen  Zoom on Brian Cowen   the tax incentives, promoted as green tax incentives introduced by the Government since 1997; and the tax foregone in each category of incentive in 2006 to date. [39075/06]

Minister for Finance (Mr. Cowen): Information on Brian Cowen  Zoom on Brian Cowen  Ireland continues to use the tax system to provide a stimulus to encourage activities that can assist policies promoting sustainable energy and tackling climate change. Details of the relevant tax incentives introduced since 1997 are as follows:

[208]

As regards benefit-in-kind exemption on employer provided public transport tickets, I am advised by the Revenue Commissioners that as taxpayers are not required to provide details of this benefit in their tax returns there is no basis on which an estimate of the cost to the Exchequer of this tax exemption can be provided.

The corporation tax forgone in respect of corporate investment in certain renewable energy generation projects is estimated at close on €8.5 million since inception to end 2005, the latest year for which figures are available. These are broken down as to €1 million for accounting year 1998/99, €3.6 million for 1999/00, €0.7 million for 2000/01, €1.3 million for 2001, €1.0 million for 2002, €0.1 million for 2003 and €0.8 million for 2005.

In relation to the limited scheme of relief from excise tax for biofuels introduced by section 50 of the Finance Act 2004 the amount of excise forgone was €422,000 in 2005 and €911,000 to date in 2006. There is as yet no basis for estimating the cost of the scheme introduced by section 81 of the Finance Act, 2006.

Figures of VRT relief for hybrid electric and flexible fuel vehicles are as set out in the following table.

Year Hybrid electric vehicles Flexible Fuel Vehicles
Numbers Cost of VRT relief Numbers Cost of VRT relief
2001 20 56,361 Nil Nil
2002 11 36,980 Nil Nil
2003 9 33,975 Nil Nil
2004 246 978,931 Nil Nil
2005 324 1,648,728 Nil Nil
2006 to date 634 4,962,268 73 228,312
Total 1,244 7,717,243 73 228,312

[209]

  83.  Ms McManus  Information on Liz McManus  Zoom on Liz McManus   asked the Minister for Finance  Information on Brian Cowen  Zoom on Brian Cowen   further to the statement of the chairman of the Revenue Commissioners at the Public Accounts Committee that he believed consumers have a legal right to a share of the refund that has been granted to opticians for VAT paid on dispensing services, the procedures in place to ensure that consumers can claim their share of the VAT refund; and if he will make a statement on the matter. [39222/06]

Minister for Finance (Mr. Cowen): Information on Brian Cowen  Zoom on Brian Cowen  I am advised by the Revenue Commissioners that, historically, they had treated the supply of corrective spectacles and contact lenses by an optician as a single supply chargeable at the standard rate of VAT (currently 21%). Opticians had, in general, accounted for VAT on the full price for the supply of spectacles and contact lenses. Opticians have always been exempt from VAT in respect of the professional fees received from eye testing, which has always been treated as a separate supply.

The Appeal Commissioner decided, in a test case, that the supply by an optician of spectacles and contact lenses constituted two separate supplies for VAT as follows:

The decision in question followed similar decisions in the UK courts. The Revenue Commissioners have accepted the decision. The principle that there are in fact two separate supplies involved is beyond dispute.

As a result, many opticians now find themselves in a position to claim a refund from Revenue of a portion of the VAT accounted for by them on their supplies of corrective spectacles and contact lenses. VAT is a consumption tax collected and accounted for by businesses. Refunds of VAT are made to the persons chargeable to, and accountable for, the tax. There are no provisions in EU VAT law, which could enable repayment of VAT to be made by Revenue to the ultimate consumer, in this instance, the customers of the opticians. Therefore, the ques[210]tion of refunds to the opticians’ customers is a matter for the optician and customer concerned. It was in that context that the Chairman of the Revenue Commissioners, in his recent appearance before the Public Accounts Committee, encouraged opticians’ customers to check out the possibility of refunds with their optician.


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