Dáil Éireann Debate, Tuesday - 15 January 2019
201. Deputy Joe Carey asked the Minister for Finance the position in relation to VAT on food supplements, vitamins and minerals; his plans to impose a 23% VAT rate on such products; and if he will make a statement on the matter. [54539/18]
View answerUnder the VAT Consolidation Act 2010, the standard rate of VAT applies to all food supplements, which are not foods in the ordinary and everyday meaning of the word. However, a longstanding concession provided through Revenue guidance permitted the zero rating of certain types of food supplements including vitamins, minerals and fish oils. The operation of the current concession became extremely problematic because of efforts by certain businesses in the industry to exploit the concession to extend zero rating way beyond the scope permitted by Revenue. These businesses consistently challenged Revenue guidance and Revenue decisions on the VAT rating of products giving rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses.
Revenue published new guidance on 27 December concerning the rate of VAT that applies to food supplements. The new guidance withdraws the concessionary application of the zero rate to certain food supplements provided for in previous guidance and these products will be liable at the standard rate from the 1 March 2019.
However, independent of Revenue’s decisions on interpretation, I agreed during the recent Finance Bill to put in place a process that will conclude in the 2019 Tax Strategy Group Paper to examine some of the policy choices around the VAT treatment of food supplements.
It should be noted, however, that human oral medicines, including certain folic acid and other vitamin and mineral products, licenced by the Health Products Regulatory Association will continue to apply at the zero rate of VAT. Infant foods will also continue to be zero rated.
