Dáil Éireann Debate, Tuesday - 23 June 2020
53. Deputy John McGuinness asked the Minister for Finance if he will consider reducing the VAT rate on hire clothing to 13.5% in the October 2020 budget; and the reason for the decision to increase the rate from 13.5% to a higher rate some years ago. [11929/20]
View answerI am advised by Revenue that the VAT rating of goods and services is subject to EU VAT law, with which Irish VAT law must comply. In general, the VAT Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within Annex III of the Directive, in respect of which Member States may apply either one or two reduced rates of VAT. The hire of clothing is not included in Annex III and as such is subject to the standard rate of VAT, currently 23%, which has always been the position. There is no discretion under the Directive for Ireland to apply a reduced rate of VAT to the hire of clothing.
