The VAT Manual has a new instruction in Chapter 8.03 concerning the VAT implications of the recent judgment of the ECJ in the case taken by the European Commission against Ireland concerning the VAT treatment of Government Departments, local authorities and public bodies.
In this case the Commission had challenged the tax treatment of State bodies and non-commercial public bodies as being, in principle, beyond the scope of VAT. The judgment found that our legislation does not fully comply with the terms of the VAT Directive and needs to be amended. It is anticipated that the appropriate changes to bring Irish legislation into line with the VAT directive will be made by means of the Finance Act 2010.
Full details are available here