Government Public Bodies will have to pay VAT says EU
Wednesday the 2nd of August 2006
The EU Commission has given Ireland two months to ensure VAT is paid by
all public bodies. They say that government departments and local
authorities should be treated as taxable persons where doing otherwise
would result in significant distortion of competition. This is good
news for the private sector who have been at a disadvantage as their
public body competitors often charged the public the same price
including VAT but did not pass it on to the Revenue thus creating a
higher margin than a real competitive market would tolerate.
This ruling will create a true discipline of market forces in state
bodies. Assertions that the EU decision will raise prices are fatuous
as the private operators competing against public bodies are more
likely to give more cost effective service to the consumer.