Cummer Coaches: Scheduled Public Bus Services Are Not “Qualifying Persons” for Touring Coach VAT Refunds; “Contracts for Group Transport” Means Multiple Group-Tourist Contracts

Introduction

This commentary examines the High Court of Ireland’s judgment in Cummer Coaches Ltd v The Revenue Commissioners [2025] IEHC 508 (Kennedy J, 20 October 2025), an appeal by case stated under section 949AQ of the Taxes Consolidation Act 1997. The case addresses whether a scheduled public bus operator, acting as subcontractor under a National Transport Authority (NTA) licence, qualifies for refunds of VAT on new touring coaches under the Value-Added Tax (Refund of Tax) (Touring Coaches) Order 2012 (SI 266/2012) (the “Order” or the “SI”).

The appellant sought €1,048,435 in VAT refunds for 2016–2019 on the basis that it was a “qualifying person” within section 2 of the Order, and that section 5 (the “disapplication” clause) did not exclude it. The Tax Appeals Commission had rejected the claim. Key issues for the High Court included:

How to interpret section 2 of the Order: is it a composite test read as a whole, or a set of four distinct limbs?
Whether “contracts for group transport” requires multiple contracts (plural) and whether one contract suffices.
Whether the appellant, operating a licensed public route, was engaged in the business of carrying “tourists” under “contracts for group transport.”
Whether, even if the appellant were a qualifying person, section 5 disapplies the refund because the coaches were primarily used for transport services other than the carriage of tourists under contracts for group transport.

The broader context includes the VAT Directive’s standstill regime on exemptions/derogations (Articles 371 and 110), the principle that derogations must be strictly interpreted, and domestic rules of statutory construction in the Interpretation Act 2005 and Irish Supreme Court jurisprudence (Dunnes, Bookfinders, Doorley).

Summary of the Judgment

The High Court dismissed the appeal, substantially affirming the Tax Appeals Commissioner’s Determination.
Section 2 is to be read holistically, not as four discrete elements; the phrase “engaged in the business of carriage for reward of tourists by road under contracts for group transport” describes a specific business model focused on tourist carriage under group contracts.
On the facts, the appellant’s business was the operation of a licensed public bus passenger service for the benefit of the general public; it was not engaged in the business of carrying tourists under contracts for group transport (para. 20).
“Contracts for group transport” requires plural contracts. The Interpretation Act’s singular/plural default yields to a contrary intention apparent from the text, context, history, and purpose of the Order (para. 22(b)). A single subcontract to run a public route did not meet this requirement, and in any event did not pertain to groups of tourists.
Even if the appellant were a qualifying person, section 5 would disapply relief because the vehicles were primarily used to provide a licensed public bus service, not “transport services consisting of carriage for reward of tourists by road under contracts for group transport” (para. 23(f)).
The proposed “50% tourists” test for “primarily” was rejected as having no basis in the text or authority (para. 23(d)); “primarily” bears its ordinary meaning, i.e., for the most part/mainly (para. 23(e)).
The Court indicated skepticism that “tourist” includes business travellers or foreign students, but the appeal failed irrespective of the precise scope of that term (paras. 14–15).
EU law limits on derogations reinforce a narrow reading: the 2012 Order did not expand relief; if anything, it narrowed it by broadening the disapplication compared to the 1996 predecessor (paras. 23(b), 23(g)).
Form-over-substance concerns: it would be anomalous if a subcontracting group structure could create a refund entitlement that the principal licence holder would not enjoy if operating directly (para. 22(c)).

Analysis

Legislative Framework and Purpose

The Order provides a refund mechanism (a derogation from the normal VAT system) for operators of touring coaches, subject to tight eligibility and disapplication rules. Section 2 confines entitlement to a “qualifying person,” defined as a person engaged in the business of carrying tourists by road for reward under contracts for group transport. Section 5 then disapplies relief for vehicles used primarily for transport services other than the carriage of tourists by road under contracts for group transport.

The Court accepted, based on the parties’ common ground (Determination para. 62), that the Order aims to support Ireland’s tourism industry by incentivising a fleet of high-quality coaches that serve tourists. Against that purposive backdrop, the Court read the key phrases of sections 2 and 5 together and in their legislative context, including the VAT Directive’s standstill provisions and their insistence that derogations are strictly confined to their historical and textual limits.

Precedents Cited and Their Influence

Dunnes Stores v Revenue Commissioners [2019] IESC 50 and Bookfinders Ltd v Revenue [2020] IESC 60: Reaffirm the primacy of ordinary meaning in context, with purposive tools available where language is ambiguous or would lead to absurdity. The Court used these principles (summarised in Perrigo) to read sections 2 and 5 as coherent, context-sensitive provisions.
Perrigo Pharma v McNamara [2020] IEHC 552: MacDonald J’s synthesis of statutory interpretation principles (quoted at para. 11) guided the Court’s focus on plain meaning in context and strictness toward exemptions.
Revenue Commissioners v Doorley [1933] IR 750: Exemptions and reliefs from taxation must be expressed in clear terms and construed strictly. This canon underpinned the Court’s reluctance to broaden relief beyond the Order’s precise language.
Commission v Spain (C-360/11) and Commission v France (C-384/01): EU law requires strict interpretation of derogations from general VAT principles. This drove the conclusion that the 2012 Order could not be read to expand refund entitlements beyond pre-existing standstill limits (paras. 23(b)–(c)).
Menolly Homes Ltd v Appeal Commissioners [2010] IEHC 49: The taxpayer bears the burden of proof (para. 13(a)). The appellant did not discharge it on either section 2 or section 5.
National Irish Bank v Graham [1994] 2 ILRM 109: While in a different context, the ordinary meaning of “primarily” accords with “for the most part” (para. 23(e)).
Quilligan and Interpretation Act 2005: The title of an enactment has limited interpretive weight and may be invoked only where ambiguity arises. The Court’s reading did not require reliance on the title, though it would have reached the same result purposively (para. 24).

The Court’s Legal Reasoning

1) Section 2 must be read holistically

The Court rejected a “four-pronged” atomised test for “qualifying person.” Instead, section 2’s phrase is a single composite description of a narrow business model: being engaged in the business of carrying tourists, for reward, by road, under contracts for group transport (para. 22(a)). Reading the text as a whole, and in the context of section 5 and the SI’s overall structure, the Court found that scheduled public bus services—even where many passengers are tourists—do not fit that description.

2) Nature of the business: public bus service versus tourist carriage

The appellant’s business was to operate, as subcontractor, a licensed public bus passenger service (route 720 Galway–Dublin/Dublin Airport). Its contractual and regulatory commitments were to provide scheduled transport to the general public, irrespective of passenger status (tourist, commuter, student, business traveller). On that footing, the Court held it was not “engaged in the business of carriage of tourists” (paras. 16–21). The fact that a high proportion of passengers might be tourists is incidental to, and does not transform, the nature and primary purpose of the business.

3) “Tourist”: a narrower concept (not determinative on the facts)

While not necessary to dispose of the appeal, the Court expressed reservations about an overly broad definition of “tourist” that would encompass business travellers and foreign students. Such a reading sits uneasily with the Order’s focus on supporting tourist activity and the historical purpose of the derogation (paras. 14–15). This signals a likely narrower approach in future disputes.

4) “Contracts for group transport”: plural means plural here

Although the Interpretation Act 2005 ordinarily allows singular to include plural and vice versa, it yields to a contrary intention apparent from the instrument. The Court found that the text and context of the Order, including emphatic repetition of the plural across the instrument, its purpose, and its legislative history, disclose such a contrary intention (para. 22(b)).

Consequently:

Multiple contracts are required; a single contract with a licence-holder to operate a public route does not suffice.
Moreover, the relevant “group transport” contracts must concern groups of tourists; a back-to-back operational contract unrelated to tourist groups is not within contemplation.
Form-over-substance: allowing a subcontractor to qualify where the principal could not would be anomalous and contrary to the Order’s intention (para. 22(c)).

5) Section 5 disapplication and “primarily”

Even if section 2 were satisfied, section 5 would disapply relief because the vehicles were “used, or intended to be used, primarily” for public bus services—i.e., transport services other than the carriage of tourists by road under contracts for group transport (para. 23(f)).

“Primarily” bears its ordinary meaning: for the most part/mainly (para. 23(e)).
The appellant’s “50% tourists” test had no textual or precedential footing and was rejected (para. 23(d)).
In substance, the coaches’ primary purpose was to fulfil the public service licence obligations; any carriage of tourists was ancillary.

6) EU law constraints: no expansion of standstill derogations

Articles 371 and 110 of the VAT Directive allow continuation of certain historical exemptions/derogations but prohibit their expansion. The Court, therefore, could not interpret the 2012 Order to extend relief beyond earlier regimes (para. 23(b)–(c)). Indeed, the 2012 changes likely narrow the derogation by broadening the scope of disapplication compared to the 1996 instrument (para. 23(g)).

Answers to the Case Stated Questions

Interpretation of section 2: No error. Section 2 is to be read as a composite phrase; a scheduled public bus service is not a “business of the carriage of tourists by road under contracts for group transport.”
Plural “contracts for group transport”: No error. The definition requires contracts (plural); a single operational contract is insufficient and, in any event, was not a contract for the transport of groups of tourists.
Whether the appellant was operating under “contracts for group transport”: No. The facts did not establish multiple group-tourist contracts.
Section 5 disapplication: Even if the appellant were a qualifying person, section 5 would disapply because the vehicles were primarily used for public bus services, not the specified tourist group transport.

What Is New or Clarified by This Judgment?

Scheduled public bus services operating under NTA licences do not fall within the Order simply because many passengers are tourists; the nature and primary purpose of the business controls.
“Contracts for group transport” in the Order requires multiple contracts and contemplates contracts linked to groups of tourists, not a single operational subcontract disconnected from tourist groups.
“Primarily” is a qualitative, ordinary-language standard; there is no “50% threshold” safe harbour.
EU standstill constraints and the structure of the 2012 Order support a narrowing rather than an expansion of the historic derogation.
Subcontracting or group corporate structures cannot manufacture eligibility where the principal operation would not qualify (form-over-substance principle).

Impact

For Public Transport Operators

Operators of licensed scheduled services (including airport routes) should not expect VAT refunds on touring coaches under the Order, even where passenger profiles skew tourist-heavy.
Subcontractors named on NTA licences are in the same position as principals; intra-group contracting will not create entitlement where the underlying public service would not qualify.
Business structuring around a single “group contract” with a licence holder is insufficient; the Order contemplates multiple group-tourist contracts.

For Tour Operators and Private Hire Businesses

Operators with multiple contracts to carry identifiable groups of tourists stand on stronger ground, provided the vehicles are primarily used for those contracts.
Evidence should focus on the nature of the business and the fleet’s primary use, not just passenger mix. Contractual documentation should clearly tie services to tourist groups.

For Revenue and the Tax Appeals Commission

The judgment provides a textual and principled framework for distinguishing eligible touring coach operations from ineligible scheduled public services.
The rejection of a quantitative “50%” benchmark for “primarily” streamlines future disputes and aligns with ordinary meaning.

Policy and Legislative Considerations

The decision coheres with EU standstill constraints and the targeted nature of the derogation. Any policy choice to subsidise scheduled public transport fleets for tourism purposes would require separate legislative instruments consistent with EU law.

Complex Concepts Simplified

Derogation: A limited exception to the standard VAT rules (e.g., allowing input VAT recovery by entities making exempt supplies). Derogations are narrowly construed and cannot be expanded beyond their historical and textual limits.
Qualifying person (section 2): A person whose business is the carriage of tourists by road for reward under contracts for group transport—understood as a composite description of a targeted business model, not a checklist where any scheduled public service might qualify.
Contracts for group transport: Contracts with groups of tourists; per this judgment, multiple such contracts are contemplated. A single operational subcontract to run a public route does not meet the requirement.
Disapplication clause (section 5): A provision that switches off the refund regime for vehicles primarily used for services other than carrying tourists under group-transport contracts. It ensures the derogation remains tightly confined.
Primarily: Ordinary meaning—mainly/for the most part. No fixed percentage threshold applies.
Public bus passenger service: Statutorily defined under the Public Transport Regulation Act 2009, a service open to the public, generally scheduled, on specified routes/timelines. Its essence is serving the public at large—not specific tourist groups.
Burden of proof: Under Menolly Homes, the taxpayer must establish entitlement; the appellant did not meet that burden here.

Conclusion

Cummer Coaches consolidates a principled, text-led approach to the Touring Coaches VAT refund regime. The High Court’s holistic reading of section 2, the insistence that “contracts for group transport” denotes multiple group-tourist contracts, and the ordinary-language application of “primarily” in section 5 collectively close the door on refund claims by operators of scheduled public bus services—no matter how tourist-heavy their passenger mix may be.

The judgment also underscores key canons: exemptions and derogations are strictly construed; EU standstill rules preclude expansion; and courts will look through corporate form to the substance of the operation. While the Court left open the precise outer boundary of “tourist,” it signalled a narrower, recreation-focused concept. The practical message is clear: only businesses whose core model is the carriage of tourist groups under multiple contracts, and whose vehicles are primarily devoted to that purpose, will come within the scope of the Order.

As a result, the appeal was dismissed and the Commissioner’s Determination affirmed. The decision will likely guide both industry structuring and Revenue/TAC decision-making in future cases concerning touring coach VAT refunds.