Dáil Éireann Debate, Tuesday - 17 June 2014
143. Deputy Willie Penrose asked the Minister for Finance if he will ensure that any consideration of proposals to apply the VAT rate of 23% to herbal teas, vitamins and health supplements are roundly rejected as such an imposition would have a negative impact on employment in these industries, and on the price sensitivity and ability of consumers to utilise such products; and if he will make a statement on the matter. [26103/14]
View answerI am advised by the Revenue Commissioners that EU VAT Directive (Council Directive 2006/112/EC) generally provides that supplies of goods and services are chargeable to VAT at the standard rate but that lower rates are permitted in very limited circumstances. Food products can only benefit from the zero rating in accordance with Article 110 of the VAT Directive which permits the retention of the zero rate where the products were liable to VAT at the zero rate on and from 1 January 1991.
A range of food supplements and vitamins that encourage the maintenance of health, through the sustenance derived from a normal, healthy diet, benefit from the zero rate. However, a food supplement taken for the purposes of muscle growth or body mass increase, or for the purposes of weight reduction or bodily sculpture, cannot benefit from the zero rate. I would draw the Deputy's attention to Revenue eBrief 70/2011 which contains additional detail in relation to the VAT rates for vitamins and food supplements.
I am further advised by the Revenue Commissioners that paragraph 8 of Schedule 2 of the Value-Added Tax Consolidation Act 2010 provides that the supply of tea and preparations derived from the crushed leaves of the tea plant when supplied in non-drinkable form is liable to VAT at the zero rate. The VAT applicable to herbal teas derived from plants other than the tea plant has been raised with me by the industry and the matter is subject to ongoing analysis.
