Written Answers. - Parliamentary Debates - Houses of the Oireachtas

Questions— 14 February 2012. Written Answers
Tax Code
135. Deputy Clare Daly asked the Minister for Finance if it is the case that the total VAT
currently being charged on ESB bills is being charged on the total bill including the carbon tax
and if this is so the basis for same. [8184/12]
Minister for Finance (Deputy Michael Noonan): I would point out initially that the carbon
tax does not apply to electricity and as such ESB bills do not include a carbon tax element, to
which VAT would apply. 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 charge 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.
International Agreements
136. Deputy Pearse Doherty asked the Minister for Finance if the ratification of the European
Stability Mechanism Treaty will take place before or after the passing of the European
Stability Mechanism Bill; and if he will make a statement on the matter. [8229/12]
Minister for Finance (Deputy Michael Noonan): The ESM treaty was signed by Euro Area
Member States on 2 February 2012. The original version of the treaty was signed on 11 July
2011, but it has been modified to incorporate decisions taken by the Heads of State and
Government (HoSG) of the Euro Area on 21 July and 9 December 2011, aimed at improving
the effectiveness of the mechanism. The treaty will have to be ratified by the 17 Euro Area
Member States. The ESM treaty will enter into force as soon as Member States representing
90% of the capital commitments have ratified it. The ESM will become operational as soon as
possible. A target date of July 2012 has been set, which is a year earlier than originally planned.
As a permanent mechanism, the ESM will take over the tasks currently fulfilled by the European
Financial Stability Facility (EFSF) and the European Financial Stabilisation Mechanism
(EFSM). With the accelerated entry into force, the ESM will now operate alongside the EFSF
for 12 months.
Primary legislation will be required to enable Ireland to ratify the ESM Treaty and
implement its provisions. It is expected that the required legislation will be published this term.
Ireland cannot ratify the ESM Treaty until the required legislation is enacted.
Tax Code
137. Deputy Thomas P. Broughan asked the Minister for Finance further to Parliamentary
Question No. 84 of 8 February 2012, in terms of State and semi-State commercial companies
employing contractors, if Revenue has carried out an investigation into whether so-called contractors
are in fact employees and the purpose of the contractor status is to minimise personal
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