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Value Added Tax

Dáil Éireann Debate, Tuesday - 20 October 2020

Tuesday, 20 October 2020

Ceisteanna (222, 223)

Niall Collins

Ceist:

222. Deputy Niall Collins asked the Minister for Finance if beauty salons are part of the reduced VAT rate (details supplied); and if he will make a statement on the matter. [31434/20]

Amharc ar fhreagra

Niall Collins

Ceist:

223. Deputy Niall Collins asked the Minister for Finance if he will clarify the areas to which the 9% VAT rate will apply (details supplied); and if he will make a statement on the matter. [31435/20]

Amharc ar fhreagra

Freagraí scríofa

I propose to take Questions Nos. 222 and 223 together.

As the Deputy will be aware, the VAT rate applied to Tourism and Hospitality related goods and services has been temporarily reduced from 13.5% to 9%, from 1 November 2020 to 31 December 2021, in recognition of the unprecedented challenges facing the sector. This change will apply to restaurant supplies, tourist accommodation, cinemas, theatres, museums, historic houses, open farms, amusement parks, and hairdressing, as well as certain printed matter.

The VAT rates applying in Ireland are subject to the requirements of EU VAT law with which Irish VAT law must comply. While hairdressing services will apply the 9% rate from 1 November, services consisting of the care of the human body, including beauticians, are subject to the 13.5% rate.

This arises from the fact that many of goods and services to which Ireland applies a reduced rate of VAT, including services related to care of the human body, have their basis under an EU derogation that provides that as Ireland applied a reduced rate to these items on 1 January 1991, we are entitled to continue applying that reduced rate to those items. However, this is conditional on the rate being no less than 12%. These are known as ‘parked’ items, and are provided for under Article 118 of the EU VAT Directive. As the services provided by beauticians are part of these parked items, it is not possible for Ireland to apply the rate of 9% to them.

Question No. 224 answered with Question No. 197.
Question No. 225 answered with Question No. 192.
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