Aisling Dempsey
Question:426. Deputy Aisling Dempsey asked the Tánaiste and Minister for Finance the reason bus drivers are not permitted to register for VAT; and if there any plans to change this. [27897/26]
View answerTuesday, 21 April 2026
Questions (426)
Written answers
The VAT treatment of goods and services is subject to EU VAT law, with which Irish VAT law is obliged to comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in the Directive, in respect of which Member States may apply a lower rate.
The Directive allows for historic VAT treatment to be maintained by a Member State under certain conditions, and, on this basis, Ireland has retained its application of a VAT exemption to the transport of passengers and their accompanying baggage. This means that, under Ireland’s VAT rules, suppliers of passenger transport services, including bus drivers, do not register for VAT, do not charge VAT on the supply of their services and, consequently, have no VAT recovery entitlement on their input costs. In accordance with the Directive, Ireland may continue to apply this historic VAT exemption on the supply of domestic passenger transport.
Bus drivers could only be permitted to register for VAT for passenger transport services if Ireland were to decide to end its historic exemption for the sector and bring passenger transport services into the VAT net. This would then require all suppliers to register for VAT and require them to charge VAT on their passenger transport services. There are currently no plans to end Ireland’s VAT exemption for passenger transport services.