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VAT Rate Application

Dáil Éireann Debate, Wednesday - 14 January 2015

Wednesday, 14 January 2015

Questions (161)

Jerry Buttimer


161. Deputy Jerry Buttimer asked the Minister for Finance the reason there has been a change in the VAT classification of smoothies made of frozen yoghurt; the reason frozen yoghurt is no longer classified as milk and preparations and extracts derived from milk and thereby zero rated for VAT; his views that applying the standard rate of VAT to these smoothies in contrast to the zero rate of VAT which applies to less healthy drinks and foods contradicts Government health policy; and if he will make a statement on the matter. [1512/15]

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Written answers (Question to Finance)

I am advised by the Revenue Commissioners that "smoothie" is a generic term for a range of blended products containing, among other things, fruit juices and other products derived from fruit, frozen yogurt and/or ice cream and, in some cases, chocolate and confectionery products.

Paragraph 8(1) of Schedule 2 of the Value-Added Tax Consolidation Act 2010, provides for the application of the zero rate to food and drink, but specifically excludes, from the zero rate, frozen yoghurt, juice extracted from, and other drinkable products derived from fruit or vegetables.  Accordingly, frozen yoghurt and smoothies are taxable at the standard rate (currently 23%).

The VAT rating of goods and services is subject to the requirements of EU VAT law with which Irish VAT law must comply.  The EU VAT Directive generally provides that supplies of goods and services be chargeable to VAT at the standard rate. Member States can retain historical zero-rated VAT treatment under Article 110 of the EU VAT Directive, where a good or service was zero rated on and from 1 January 1991.  Ireland applies the zero rate to most food. In this context, it is not possible to apply the zero rate to any new food and drink items that have not already applied at the zero rate.