Despite the on-going energy crisis, the Government is continuing to defer the question of if and when it might reduce the VAT on bicycles and servicing to the Budget in October.
As reported by this website previously, an EU rule change allowing Governments to reduce the VAT rate to 0% is expected to take place shortly. Lower rates of VAT will be able to be applied to goods and services such as the sale or repair of bicycles and electric bicycles.
It was known last year that Belgium already passed legislation to take advantage of the EU rule change once finalised at EU-level — progress on this was reportedly made in early March and the change is expected to be finalised this month or soon afterwards.
Once the rule change is finalised, the VAT rate for bicycles could be reduced to zero, if Government choices to set it at that level.
In a written parliamentary question, Cork East TD, Pat Buckley (Sinn Fein), asked the “Minister for Finance if his Department will consider lowering the VAT rate to 0% on the sale and repair of bicycles and electric bicycles; if his Department will follow the lead of Belgium which has already passed legislation to take advantage of European rule changes; and if he will make a statement on the matter.”
Minister for Finance and Dublin Central TD, Paschal Donohoe (Fine Gael), said: “I understand that the proposal for reform of VAT rates is currently being finalised, this process involves, inter alia, ensuring consistent translations of the text in every working language of the European Union. Once finalised, I expect the proposal will be published in the Official Journal of the European Union in the coming weeks.”
“Officials in my Department are currently reviewing the options now available to Ireland in setting VAT rates. This will include consideration of the new options available to Member States when setting VAT rates as well as the new limitations introduced on how reduced rates may be applied,” he sadi.
Minister Donohoe added: “Decisions about tax changes are generally taken in the context of the Budget and, as part of our normal annual Budget preparations, various options for tax policy changes will be considered by the Tax Strategy Group prior to Budget 2023. The papers presented to the Tax Strategy Group, including a paper on VAT, are published in advance of the Budget.”
In March, Holger Haubold, European Cyclists’ Federation (ECF) Director of Intellectual Property and Data Collection, told IrishCycle.com: “As far as we know, the VAT rates agreement is still supposed to pass as planned… If anything, the current situation should be even more of a reason for Member States to reduce VAT rates on cycling to make it an even more affordable alternative to individual fuel-driven transport.”
Subscription drive update: IrishCycle.com reached its target of 270 subscribers by the end of August -- thank you to all who have helped! Our new target is to have 300 subscribers by the end of 2022 -- originally this was hoped to be exceeded by the first year of running the site full time (end of October).
If you can help push IrishCycle.com above 300 subscribers, please subscribe today for €5 or more. If you have already done so -- thank you!
Please remember, every month there's a natural drop-off in subscriptions due to people getting new cards, cards stolen, Revolut not topped up etc.
IrishCycle.com is a reader-funded journalism publication. Effectively it's an online newspaper covering news and analyses of cycling and related issues, including cycle route designs, legal changes, and pollical and cultural issues.
There are examples, big and small, which show that the reader-funded or listener-funding model can work to support journalism -- from the Dublin Inquirer and The Guardian to many podcasts. To make it work for IrishCycle.com, it just needs enough people like you to believe!
Monthly subscriptions will give IrishCycle.com's journalism a dependable base of support. But please don't take free access for granted. Last year IrishCycle.com had an average of 15,800 readers per month and we know our readers include people who cycle and those who don't, politicians, officials and campaigners.
I know only a small percentage of readers will see the value of keeping this open enough to subscribe, that's the reality of the reader-funded model. But more support is needed to keep this show on the road.
The funding drive was started in November 2021 and, as of the start of June 2022, 250 readers have kindly become monthly subscribers -- thank you very much to all that have!
But currently, it's only around 1.6% of readers who subscribe. So, if you can, please join them and subscribe today via ko-fi.com/irishcycle/tiers