John Lyons
Question:163. Deputy John Lyons asked the Minister for Finance if he will explain the reason VAT is applied to carbon taxes in household utility bills; and if he will make a statement on the matter. [44081/12]
View answerTuesday, 16 October 2012
Questions (163)
Written answers
The amount on which VAT is chargeable, in accordance with section 37(1) of the Value-Added Tax Consolidation Act 2010, is the total consideration receivable by the supplier, “including all taxes, commissions, costs and charges whatsoever” but not including the VAT itself. VAT is governed by the EU VAT Directive, with which Irish VAT law must comply. Article 78 of the VAT Directive provides that the taxable amount shall include “taxes, duties, levies and charges, excluding the VAT itself”.
In this respect, where a supply of service, such as a gas bill, includes carbon tax, VAT law dictates that VAT should be calculated on the carbon tax element of the bill as well as the charge for the service. The same situation applies in the case of other excises, including for example excises on petrol, auto-diesel, tobacco and alcohol products.
Guidance in relation to the VAT treatment of the total consideration receivable by a supplier is set out in the VAT Guide. This publication is available on the Revenue website at www.revenue.ie.