Dáil Éireann Debate, Wednesday - 12 October 2022
43. Deputy Richard Boyd Barrett asked the Minister for Finance further to Parliamentary Question No. 232 of 4 October 2022, the reason that karate-class training for children is not “care of the human body” in the same way as yoga and pilates; and if he will make a statement on the matter. [50440/22]
Amharc ar fhreagraServices consisting of the care of the human body supplied in the course of a health studio business or similar business, such as a yoga studio, are not listed in Annex III and therefore would in general be subject to the standard rate. However, the Directive allows a Member State to continue its application of a historic VAT treatment, under certain strict conditions, including that the application of the historic treatment cannot be expanded. On this basis, Ireland has retained the application of its reduced rate of VAT, currently 13.5%, to the services of yoga studios. There is no discretion under the Directive to expand the application of this VAT rate to other supplies, for example to karate-class training for children.
As the Deputy may be aware, changes in the VAT Directive agreed in April this year would allow for a reduced rate to apply to the supply of sport or physical exercise classes. Changes in VAT rates are considered as part of the normal annual Budget and Finance Bill process. In addition to the overall impact of tax changes to the budget, any VAT changes considered by a Member State must account for the new limitations introduced on the number of categories of goods and services to which a Member State may apply a reduced VAT rate within Annex III.
