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Water Charges

'Domestic users will not be charged VAT' by Irish Water

Government sources said that the framework in Irish Water is still being set up but that the government does not want to see households pay extra taxes on their Irish Water bills.

GOVERNMENT SOURCES HAVE asserted that domestic users will not face an additional VAT charge when their Irish Water bills come through the letter box.

A report today suggested that, as a private company, Irish Water would be obliged under European law to impose the tax. However government sources told that households will not face VAT on top of their water charges as “this is how the government want to proceed with this”.

“The problem is we’re still setting up Irish water so none of these things have been finalised but the government has said that it doesn’t want to see domestic users charged VAT,” one source said.

It is likely that commercial users will be obliged to pay the tax on top of charges though the source said that “lots of companies are able to claim back VAT”.

In response to a query from, the Department of the Environment, Community and Local Government said that work is underway on the overall structure of Irish Water, its financial model and the treatment of its function for taxation. “The outcome of this work will determine its VAT treatment,” it said.

The department said that Minister Phil Hogan is “working to ensure charges are fair and equitable for everyone, and that consumers are protected”.

Read: No water charge prices until at least the end of the year>

Read: Good news on the jobs front: Irish Water to create 1,600 jobs>

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