It's not often that the European Court of Justice takes a dim view of Ireland's capacity to apply EU standards to its tax legislation, but in a matter driven by car parking spaces the ECJ has found us deficient.
In Case C554/07, the Commission challenged Ireland in the way VATA72 applies the EU VAT directive. Under the terms of the VAT directive, public bodies generally are not taxable persons. As such, they don't have to charge VAT on any goods or services they provide. Unless, that is, by not charging VAT, they create distortions in the market.
The background to this case is that the Commission had received a complaint that, by not subjecting local authorities operating off-street parking facilities to VAT (while commercial operators doing the same thing had to charge VAT at the standard rate), Ireland had failed to fulfil its obligations under the Sixth Directive. The Commission issued a "reasoned opinion" to Ireland, to which we responded but not, apparently, to the Commission's satisfaction.
The ECJ noted the provisions in the VAT Act which permit the Minister to direct that public bodies should charge VAT in certain circumstances, but found this insufficient to meet the requirement to implement the VAT directive. Further, the VAT Act should contain a general requirement that economic activities in which public bodies engage otherwise than in their capacity as a public authority are to be subject to VAT, as well as a requirement that they should pay VAT if engaged in "Annex 1" activities - telecoms, utility supply, transport, warehousing and the like.
An Irish challenge to the admissibility of the case, on the basis that its terms of reference had widened beyond the parking spaces issue of the original complaint, also failed.
The judgment can be found here