Dáil Éireann Debate, Wednesday - 23 October 2024
68. Deputy Colm Burke asked the Minister for Finance if he will give due consideration to removing VAT on the sale of wigs, currently charged at 23%, to those with medical conditions, such as cancer or alopecia sufferers; and if he will make a statement on the matter. [43331/24]
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 EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within the categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT.
Wigs are not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT to be applied, and as such they are liable to VAT at the standard rate. There is no discretion under the Directive for Ireland to apply a lower rate of VAT to the supply of wigs.
However, EU law does allow for certain historic VAT treatments to be maintained by a Member State under certain strict conditions, including that a historic treatment cannot be widened beyond its existing scope. On this basis, Ireland has retained its application of the zero rate to children’s clothing. Therefore, wigs which are described, labelled, marked, or marketed for children under 11 years of age would qualify for the zero rating as an item of children’s clothing.
I am further advised by Revenue that wigs have previously been confirmed as an allowable health expense on income tax. Where medical evidence indicates that it is necessary in the provision of health care, the cost may be allowed on the advice of a medical practitioner. Claims for such relief can be made through the MyAccount portal on the Revenue website.
