Tax Code

Tuesday, 27 July 2021

Questions (405)

Aengus Ó Snodaigh

Question:

405. Deputy Aengus Ó Snodaigh asked the Minister for Finance the reason performers of live music at functions, dances and in venues including pubs are subject to the standard VAT rate of 23% for their hiring service or admission charges while performers of live music in theatres and other venues with or without food or drink are subject to a much lower VAT rate of 9% or no VAT; and if he will consider lowering the rate for those workers and businesses who provide the service of live music currently charged 23% to assist in the recovery of the music and entertainment sector following the devastating effects of the Covid-19 pandemic and restrictions. [40720/21]

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Written answers

Minister for Finance

The VAT rating of goods and services is subject to EU VAT legislation with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, currently 23% in Ireland, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate from VAT. Ireland, in line with the VAT Directive, also maintains several standstill provisions and derogations that allows it to maintain reduced rates to certain supplies for historical reasons. It is on this basis that Ireland had provided for an exemption or a reduced rate of VAT of 9% to apply to the promotion of and admissions to live theatrical or musical performances (excluding dances) depending on whether food or drink is available for consumption.

It is not possible under the VAT Directive to allow a reduced rate of VAT to be applied to the fee charged by a performer; this can only be applied to the promotion and admission charges. This means that where a band or entertainer is hired for a function such as a wedding, the hiring service is subject to the standard rate of VAT, currently 23%.