Wednesday, 23 January 2019

Ceisteanna (74)

Pat Deering


74. Deputy Pat Deering asked the Minister for Finance the financial and health advice received from the Revenue Commissioners and the Department of Health, respectively, in relation to the proposed introduction of 23% VAT rate on health food supplements, for example, folic acid recommended to pregnant women and persons with anaemia that need iron supplements (details supplied); if this is implemented, if certain supplements will be exempt; and if he will make a statement on the matter. [3242/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

The standard rate of VAT applies to food supplements. However, a Revenue Commissioners concession allowed the zero rate to be applied to certain types of vitamins, minerals and fish oils.  Revenue has since decided to remove this concession with effect from 1 March 2019 so that all food supplements will be charged at the standard VAT rate. 

The operation of the concession became extremely problematic as a result of efforts by certain businesses in the industry to extend the concession beyond the scope permitted. Consistent challenges to Revenue guidance and decisions on the VAT rating of products gave rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses.

However, independent of Revenue’s decisions on interpretation, I agreed during the recent Finance Bill to put in place a process that will conclude in the 2019 Tax Strategy Group Paper to examine some of the policy choices around the VAT treatment of food supplements.

It should be noted, however, that human oral medicines, including certain folic acid and other vitamin and mineral products, licenced by the Health Products Regulatory Association will continue to apply at the zero rate of VAT.  Infant foods will also continue to be zero rated.