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VAT Rate Application

Dáil Éireann Debate, Wednesday - 20 February 2019

Wednesday, 20 February 2019

Questions (87, 89, 95, 96, 97)

James Lawless

Question:

87. Deputy James Lawless asked the Minister for Finance the rationale for the increase from a 0% to 23% rate of VAT on health foods and supplements; his views on whether it is justified; his further views on whether this may detrimentally affect the health of users of such supplements; and if he will make a statement on the matter. [8727/19]

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Seamus Healy

Question:

89. Deputy Seamus Healy asked the Minister for Finance if the 23% VAT increase on all vitamins, minerals and food supplements on health and financial grounds will be reversed; and if he will make a statement on the matter. [8547/19]

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Carol Nolan

Question:

95. Deputy Carol Nolan asked the Minister for Finance the steps he will take with the Revenue Commissioners to reverse the decision to place a 23% VAT rate on all food supplements including vitamins, minerals, probiotics and fish oils; and if he will make a statement on the matter. [8653/19]

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Carol Nolan

Question:

96. Deputy Carol Nolan asked the Minister for Finance his views on whether a tax on products that will have a positive impact on health goes against the Healthy Ireland initiative; and if he will make a statement on the matter. [8654/19]

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Carol Nolan

Question:

97. Deputy Carol Nolan asked the Minister for Finance his views on whether the VAT rate of 23% on all food supplements if implemented could lead to the closures of health food stores and the loss of jobs; and if he will make a statement on the matter. [8655/19]

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Written answers (Question to Finance)

I propose to take Questions Nos. 87, 89 and 95 to 97, inclusive, together.

Under the VAT Consolidation Act, 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 (vitamins, minerals and fish oils). Revenue published new guidance on 27 December 2018 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 1 March 2019.

Food supplement products that did not fall within the withdrawn concession were already liable at the standard rate and this remains unchanged. Human oral medicines and other health products, including folic acid and vitamin products, that are licenced by the Health Products Regulatory Agency (HPRA) are liable at the zero rate, meaning that access to the health benefits of these products also remains unchanged.

Independent of the Revenue Commissioners' decisions on interpretation, I agreed during last year's Finance Bill to put in place a process that will involve the examination of some of the policy choices around the VAT treatment of food supplements by the Tax Strategy Group in advance of this year's Budget.

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