Dáil Éireann Debate, Tuesday - 21 March 2023
320. Deputy Paul Donnelly asked the Minister for Finance the reason the VAT rate for dog grooming is at 23%, while the hair dressing industry is taxed at 9%; and if he will make a statement on the matter. [13029/23]
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 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. Ireland currently operates two reduced rates of VAT, 13.5% and 9%, as permitted by the Directive.
The provision of dog grooming services is not included in Annex III and as such is subject to the standard rate of VAT, currently 23%. There is no discretion under the Directive for Ireland to apply a reduced rate of VAT to this service.
As hairdressing is included in Annex III of the VAT Directive a reduced rate of VAT may be applied to it.
The Deputy may be interested to know that by way of special derogation from the general rule, Ireland is permitted to continue its long-standing practice of applying a reduced rate, currently 13.5%, to the supply of services by a veterinary surgeon in the course of their profession, but there are strict restrictions on this derogation, including that the rate cannot be reduced below 12%. However, where a veterinary surgeon carries out a dog grooming services as part of the veterinary procedure, such as treating an illness or disease, the dog grooming is considered part of the veterinary procedure and the entire procedure is liable to VAT at the reduced rate. Where a veterinary surgeon provides a dog grooming service as a supply that is distinct from a veterinary procedure the service is liable to VAT at the standard rate of 23%.
