Dáil Éireann Debate, Tuesday - 24 October 2023
196. Deputy Richard Boyd Barrett asked the Minister for Finance if there has been any reduction in the VAT rate applied to sports and fitness classes in Budget 2024; and if he will make a statement on the matter. [46309/23]
View answerThe Deputy should note that no decision was made in Budget 2024 to reduce the VAT rate on sports and fitness classes.
I did give the matter some consideration as amendments to the VAT Directive in 2022 permit a reduced rate to be applied to the supply of sport or physical exercise classes. In addition, Ireland has used a historical derogation to apply a 13.5% rate to care of the human body, which covers yoga.
However, on balance, I decided there would be challenges in determining how it would be defined in such a way as to avoid one type of activity having an advantage over another and thus be in breach of the principle of fiscal neutrality. For instance it would be challenging to provide a reduction on the basis of age or type of class.
The Deputy should note that when sports or fitness classes are provided by companies or sole traders who are not registered for VAT because they operate below the VAT registration threshold no VAT is charged.
Finally, as with other VAT rate reductions it should be noted that while the VAT charged must always be correct a company can increase the base price of the service so that the final consumer does not benefit from such a reduction.
