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 (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.
The Directive provides that the letting of immovable goods is exempt from VAT. The Directive also provides the landlord with a right to exercise an option to tax lettings, in certain circumstances, and if such option is exercised by the landlord, the applicable rate of VAT is the standard rate of VAT, which in Ireland is currently 23%.
Therefore, the service of mooring of boats/vessels at harbours and marinas – which is a letting of immovable goods – is generally exempt from VAT. However, in accordance with the Directive and as provided for under section 14(2) of the Value-Added Tax Consolidation Act 2010, where a public body (such as a local authority) provides such a letting in competition with private operators, it is considered to be engaged in an economic activity, and thus its supply of the exempt letting comes within the scope of VAT. This means that a local authority supplying the moorings can either provide them as VAT exempt supplies, or can opt to tax the moorings at 23%. Similarly, if a private operator were supplying lettings of immovable goods (including moorings) the same option to tax would also exist for that operator for what would, otherwise, be exempt supplies.
