Martin Heydon
Question:155. Deputy Martin Heydon asked the Minister for Finance if he will provide clarification on the VAT treatment of herbal teas; and if he will make a statement on the matter. [27158/14]
View answerTuesday, 24 June 2014
Questions (155, 157)
Michael McCarthy
Question:157. Deputy Michael McCarthy asked the Minister for Finance if consideration is being given to proposals to apply a VAT rate of 23% to herbal teas, vitamins and health supplements; if so, the reason this is being considered in view of the beneficial health effects of these products and the negative impact this proposal will have on employment in these industries; and if he will make a statement on the matter. [27194/14]
View answerWritten answers
I propose to take Questions Nos. 155 and 157 together.
I am advised by the Revenue Commissioners that the 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 of 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 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.