VAT Rate Application

Dáil Éireann Debate, Thursday - 31 January 2019

Thursday, 31 January 2019

Ceisteanna (58, 64, 65, 66, 68)

Paul Kehoe

Ceist:

58. Deputy Paul Kehoe asked the Minister for Finance the reason for changing the application of VAT (details supplied); and if he will make a statement on the matter. [4835/19]

Clare Daly

Ceist:

64. Deputy Clare Daly asked the Minister for Finance if supplements such as probiotics that are being taken on the advice of or as prescribed by a consultant gastroenterologist will be subject to a 23% VAT rate after 1 March 2019 or if an exemption will apply. [4806/19]

Clare Daly

Ceist:

65. Deputy Clare Daly asked the Minister for Finance when the 2019 Tax Strategy Group paper including a review of VAT rates for food supplements and vitamins will be published. [4807/19]

Danny Healy-Rae

Ceist:

66. Deputy Danny Healy-Rae asked the Minister for Finance if the decision to introduce a VAT rate of 23% on food supplements such as vitamins will be reviewed; and if he will make a statement on the matter. [4844/19]

Maureen O'Sullivan

Ceist:

68. Deputy Maureen O'Sullivan asked the Minister for Finance the rationale for the 23% VAT rate for health supplements; if his attention has been drawn to the effect it will have on regular purchasers of supplements; and if he will make a statement on the matter. [4882/19]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 58, 64 to 66, inclusive, and 68 together.

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.

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 and food products such as yoghurts that contain probiotic ingredients will also continue to be zero rated.

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. The Tax Strategy group paper will be published, in line with previous years, in the summer of this year.