Dáil Éireann Debate, Tuesday - 20 June 2023
245. Deputy Neasa Hourigan asked the Minister for Finance if he will outline the items of which the reduced VAT rate of 5% have been applied in the Irish context to date; and if he will make a statement on the matter. [29300/23]
View answer247. Deputy Neasa Hourigan asked the Minister for Finance if he will outline the items of which the reduced VAT rate of less than 5% have been applied in the Irish context to date; and if he will make a statement on the matter. [29302/23]
View answerI propose to take Questions Nos. 245 and 247 together.
The VAT rating of goods and services is subject to the requirements of EU VAT law, 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, 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. Within its rates structure, the EU VAT Directive also allows historic VAT treatment to be maintained under certain conditions on certain goods and services not provided for in Annex III.
Currently Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%. Ireland is also permitted to retain some historic VAT arrangements, under strict conditions.
In this context, the following reduced VAT rates apply in Ireland:
• Reduced rate of 13.5% applies to approximately 29% of activity and represents approximately 25% of VAT receipts. It includes home heating oil and solid fuels, construction, housing, labour intensive services and general repairs and maintenance.
• Reduced rate of 9% applies to approximately 12% of activity and represents approximately 6% of VAT receipts. It includes tourism and hospitality sectors to 31 August 2023, along with periodicals, and sporting facilities. It also includes the supply of gas and electricity to 31 October 2023.
• Super-reduced 4.8% rate applies to livestock by VAT registered farmers ( as per Annex VII of EU VAT Directive).
• Zero rate applies to 7 categories of Annex III of the EU VAT Directive. It accounts for 10% of activity and It applies to most food, books, children’s clothes and shoes, oral medicines, some medical equipment, the supply of services in connection with the operation of lightships and lighthouses and, from 1 May 2023, the supply and installation of solar panels.
• Exempt services include transport services, funerary services, supply of water, provision of education, financial services, medical services and services provided by charities.
