Dáil Éireann Debate, Tuesday - 25 January 2022
244. Deputy Cathal Crowe asked the Minister for Finance the reason the beauty industry is subject to a VAT rate of 13.5% while the hairdressing sector pays a 9% rate; if this anomaly can be rectified; and if he will make a statement on the matter. [3175/22]
Amharc ar fhreagraThe VAT rates applying in Ireland are subject to the requirements of EU VAT law with which Irish VAT law must comply. While hairdressing services apply the 9% rate from 1 November 2020, 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.
