Pearse Doherty
Ceist:215. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance the projected increase in VAT revenue on home heating oil as a result of the increase in home heating oil price. [39795/26]
Amharc ar fhreagraTuesday, 26 May 2026
Ceisteanna (215)
Freagraí scríofa
The VAT rating 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 are exempt from VAT or fall within the categories of goods and services listed in Annex III of the EU VAT Directive, to which Member States are permitted to apply lower VAT rates subject to certain rules.
Home heating oil is not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT. However, the Directive allows that a Member State may retain certain long-standing VAT arrangements that they had in place, subject to strict conditions including that the terms of the historic arrangement cannot be extended. On this basis, Ireland is permitted to retain its long-standing application of its reduced VAT rate – which is currently 13.5% – to the supply of hydrocarbon oil of a kind used for domestic or industrial heating fuel.
I am further advised by Revenue that traders are not required to identify the VAT yield generated from the supply of specific goods and services on their VAT returns. Therefore, it is not possible to determine the VAT yield on home heating oil from taxpayer information alone. However, using Revenue and third-party data sources, a tentative estimate of the VAT generated on home heating oil for the period January to March 2026 is €43.3 million, compared to €38.9 million for the same period in 2025.
It should also be noted that the Government deferred the increase in carbon tax which was due to place on 1 May 2026 until 14 October 2026. The estimated cost of this deferral is approximately €22 million.