Under the VAT Consolidation Act, the standard rate of VAT applies to all food supplements, which are not foods in the ordinary and everyday meaning of the word. However, a longstanding concession provided through Revenue guidance permitted the zero rating of certain types of food supplements (vitamins, minerals and fish oils).
Revenue published new guidance on 27 December 2018 concerning the rate of VAT that applies to food supplements. The new guidance withdraws the concessionary application of the zero rate to certain food supplements provided for in previous guidance and these products will be liable at the standard rate from 1 March 2019. Food supplement products that did not fall within the withdrawn concession were already liable at the standard rate and this remains unchanged. Human oral medicines and other health products, including folic acid and vitamin products, that are licensed by the Health Products Regulatory Agency (HPRA) are liable at the zero rate.
Independent of the Revenue Commissioners' 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.