Dáil Éireann Debate, Tuesday - 14 May 2019
116. Deputy Pearse Doherty asked the Minister for Finance his views on whether a correction to the record of Dáil Éireann is required regarding his replies on the issue of the historic treatment of food and food supplements for the purposes of VAT; and if he will make a statement on the matter. [20446/19]
Amharc ar fhreagraI wish to inform the Deputy that no correction is required to the record of Dáil Éireann in relation to the VAT treatment of food supplements.
VAT legislation does not apply the zero rate of VAT to food supplements but shortly after the introduction of VAT Revenue applied a concessionary zero rating to certain vitamin, mineral and fish oil products. As the market developed over the years this treatment resulted in the zero rating by Revenue of further similar products, including products other than vitamins, minerals and fish oils, and these rulings were published in Revenue’s VAT rates database. The evolution of the scope of the concessionary treatment of certain types of food supplements was well understood by the industry and by agents representing clients in the food supplements sector. The scope had broadened progressively over time to the point that it had become increasingly difficult to maintain an effective distinction between food supplements that could benefit from the zero rate and those that were standard rated.
After undertaking a comprehensive review of the VAT treatment of food supplements, including commissioning an expert report on the definition of food for the purposes of the VAT Consolidation Act, Revenue issued new guidance in December 2018 which removed the concessionary zero rating of various food supplement products with effect from 1 March 2019.
Following representation from Deputies and from the industry I wrote to Revenue outlining my plans to examine the policy and legislative options for the taxation of food supplement products in the context of Budget 2020, including the opening of a public consultation. Revenue decided to extend the date of the removal of the zero rating from March to November 2019, to allow for the enactment of any potential legislative changes in the context of Budget 2020.
The consultation process concerning the taxation of food supplement products has been launched and is available on my Department’s website here - https://www.gov.ie/en/consultation/019b82-consultation-on-the-vat-treatment-of-food-supplement-products/. This consultation will help identify potential policy options in relation to VAT on food supplements. Input is being sought from a wide range of interested parties, including from health and nutrition experts, to ensure that any policy options brought forward are evidence based. I will separately consult with my colleague the Minister for Health in this regard.
