Dáil Éireann Debate, Tuesday - 5 March 2019
146. Deputy Brendan Griffin asked the Minister for Finance his views on a matter (details supplied) in relation to the VAT rate changes for health food supplements; and if he will make a statement on the matter. [10832/19]
Amharc ar fhreagraI am informed by the Revenue Commissioners that the standard rate of VAT applies to food supplements in general while a concession allows the zero rate to be applied to certain types of vitamins, minerals and fish oils.
The operation of this 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. For these reasons, Revenue announced last December the decision to remove this concession with effect from 1 March 2019, which would have had the effect that all food supplements would be charged at the standard VAT rate.
Revenue has since deferred this date to 1 November 2019 in order to allow time for my Department to examine the policy and legislative options for the taxation of food supplements ahead of Budget 2020. This, in effect, means that the current VAT treatment of food supplements will remain in place. The zero rate of VAT applies to basic food supplements, such as vitamins, minerals and fish oils. All other supplements, such as those designed for cosmetic or body building purposes, apply at the standard VAT rate.
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. With this in mind, and cognisant of the opinions expressed by all parties on the VAT treatment of food supplements, I propose to issue a public consultation seeking engagement from all parties on the issue. I will also consult with my colleague the Minister for Health on the use of food supplements. This consultation will feed into the review undertaken by the Department in the tax strategy group process. Details on the proposed public consultation will be announced in the near future.
