Shortly after the introduction of VAT, Revenue allowed the zero rate to be applied to certain food supplement products (vitamins, minerals and fish oils). This concessionary approach expanded as the market developed over the years and resulted in the zero rating by Revenue of further similar products, including products other than vitamins, minerals and fish oils.
Revenue has acknowledged that the scope of its concessionary approach broadened progressively over time to the point that it had become increasingly difficult to maintain an effective distinction between food supplement products that could benefit from the zero rate and those that were standard rated.
Following a review by Revenue, who commissioned an expert report, it was concluded that the status quo was no longer sustainable. Revenue engaged with my Department, which subsequently conducted a public consultation. The public consultation ran from 18 April to 24 May 2019 and sought input from a wide range of interested parties, including from health and nutrition experts and the Minister for Health. The results of the consultation were included in the 2019 Tax Strategy Group paper on VAT.
I subsequently made provision in Finance Bill 2019 to apply the 13.5% rate of VAT to all food supplement products, which took effect from 1 January 2020. Foods for specific groups such as infant follow-on formulae and infant foods, foods for special medical purposes and specially formulated foods (e.g. total diet replacement for weight control) remain zero rated. These are well established and defined categories of food that are essential for vulnerable groups of the population. Fortified foods, such as yoghurts and cereals fortified with vitamins and minerals, will also remain zero rated as they are food.
Folic acid, vitamin and mineral products for human oral use which are licenced or authorised as medicines by the Health Products Regulatory Authority (‘HPRA’) will remain zero rated under a different VAT provision.