Dáil Éireann Debate, Thursday - 4 December 2025
239. Deputy Ken O'Flynn asked the Tánaiste and Minister for Finance if he has examined the feasibility of developing a non-VAT capital support mechanism, such as an accelerated capital allowance or targeted grant, to support licensed bus operators in purchasing new low-emission vehicles, given the VAT constraints described in his reply to Parliamentary Question Nos. 143 and 144 of 26 November 2025; and if he will make a statement on the matter. [68768/25]
Amharc ar fhreagra245. Deputy Ken O'Flynn asked the Tánaiste and Minister for Finance if the Department has modelled the fiscal impact of allowing licensed bus operators to benefit from an accelerated capital allowance for the purchase of new low-emission buses; and if he will provide the estimated costings under scenarios of 20 percent, 30 percent and 40 percent accelerated allowance rates. [68774/25]
Amharc ar fhreagraI propose to take Questions Nos. 239 and 245 together.
There has been no specific assessment into the fiscal impact or general feasibility studies of allowing licensed bus operators to benefit from non-VAT capital supports, such as an accelerated capital allowance for the purchase of low-emission buses as the Deputy has suggested.
The Deputy may be aware that, in general, capital allowances in the form of wear and tear allowances are available in respect of expenditure incurred on qualifying business assets, including buses, at a rate of 12.5% annually over eight years. However, there are two accelerated capital allowances schemes which bus operators may qualify for where the conditions are met.
Section 285C of the Taxes Consolidation Act (TCA) 1997 provides for an accelerated capital allowances scheme for capital expenditure incurred on gas and hydrogen propelled vehicles and refuelling equipment. This scheme commenced on 1 January 2019 and was extended to hydrogen powered vehicles from 1 January 2022. The scheme provides for 100% of the capital allowances available in respect of qualifying equipment or vehicle to be claimed in the year in which it is first used in the business. Bus operators who incur capital expenditure on buses which run on compressed natural gas, liquefied natural gas, biogas or hydrogen may qualify for accelerated capital allowances under the scheme.
Section 285A of the TCA 1997 provides for an accelerated capital allowance scheme for capital expenditure incurred by businesses on energy efficient equipment. The scheme again provides for 100% of the capital allowances available in respect of qualifying equipment to be claimed in the year in which it is first used in the business. To qualify for the scheme, the item of energy-efficient equipment must be included on a register (Triple E register) published and maintained by the Sustainable Energy Authority of Ireland (SEAI). While certain low emission vehicles are currently included on the register, there are no electric vehicle (EV) buses on the register at present.
I am advised by Revenue that separate data on capital allowances claimed in respect of the cost of low-emission buses is not available. Therefore, the estimated costs requested are not available.
