I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law must comply. In accordance with the Directive, Ireland maintains a standstill provision which permits the retention of the zero rate for certain food and drink products that were liable to the zero rate on 1 January 1991. This standstill provision cannot be extended.
The Value-Added Tax Consolidation Act, 2010 provides for the application of the zero rate to food and drink, but specifically excludes juice extracted from, and other drinkable products derived from, fruit or vegetables. Accordingly, fruit juice is taxable at the standard rate. However, where fruit juice is provided as part of a restaurant or catering service it is liable to VAT at the second reduced rate of VAT, currently 9%.
Under Annex III of the EU VAT Directive, Member States are permitted to apply a reduced rate of VAT of not less than 5% to fruit juice. However, Ireland has a significantly wider range of goods and services taxed at the zero and reduced rates of VAT compared with other EU member states, and I have no plans to narrow the tax base further. Notwithstanding their sugar content, fruit juices are exempt from the Sugar Sweetened Drinks Tax.