In replying to the Deputy’s Question No 178 of 5 February 2019, I stated that “there is no means under EU VAT law to apply a lower VAT rate to the supply of non-alcoholic beer”. I regret to inform the Deputy that this is incorrect. The position is that it may be possible under Annex III of the VAT Directive for a reduced rate to be applied to non-alcoholic beverages.
I have no plans to reduce the VAT rate on non-alcoholic beverages. The majority of drinks, including soft drinks and bottled water, are charged to VAT at the 23% standard VAT rate in Ireland. Applying a reduced VAT rate to non-alcoholic beer and wine would necessarily involve the application of different VAT rates to supplies of non-alcoholic beverages. This would be difficult to administer and would be likely to provide considerable scope for manipulation of the VAT system and potential opportunities for tax avoidance.