VAT Rate Ireland | VAT on Services & VAT Rates Database
Ireland, in line with all EU member countries, complies with the EU VAT Directive. However, it still has the freedom to set its own standard (upper) VAT rate. The only condition is that it must be above 15%.
VAT-registered suppliers of goods or services in Ireland must apply the correct VAT rate, collect the tax, and then remit it to the Irish tax authorities through a VAT filing. So, what is the standard VAT rate in Ireland?
Standard VAT Rate in Ireland
In Ireland, the standard Value-Added Tax (VAT) rate is 23%, which applies to most goods and services, including consultancy, legal services, furniture, motor vehicles, and tires.
This is a brief overview provided by Revenue Ireland. In practice, most of your business purchases and sales will likely be subject to this standard rate, unless a reduced rate, zero rate, or exemption applies.
The reduced VAT rates are 13.5% and 9%, with a super-reduced rate of 4.8%. Furthermore, in Ireland, certain goods are zero-rated, meaning they must be reported on your VAT return, despite, no VAT being charged.
VAT Increase News
Value-Added Tax (VAT) has seen changes over the years, influenced by economic conditions and fiscal policies. For example, in response to the COVID-19 pandemic, the standard VAT rate was temporarily reduced to 21% from 1 September 2020 to 28 February 2021. As of 2024, the standard VAT rate in Ireland is 23%.
Starting in January 2024, Ireland will implement several significant changes to VAT rates. Audiobooks and e-books will see a substantial reduction, with the VAT rate dropping from 9% to 0%. Additionally, the VAT rate for the supply and installation of solar panels on school buildings, including any ancillary equipment within the same contract, will also be set to 0%.
On the other hand, the previously reduced VAT rate of 9% on gas and electricity has been extended for an additional 12 months, now lasting until 31 October 2024. Looking ahead, the Irish government has announced that from 1 January 2026, the VAT rate for accommodation services and cultural services, such as theatres and concerts, will increase from 9% to the standard rate of 21%.
VAT on Services Ireland
In Ireland, as discussed above, most services are subject to the standard VAT rate of 23%. However, there are reduced rates and exemptions for specific services. This means that these services are not subject to VAT, and businesses providing them do not charge VAT to their customer.
| VAT Rate | Type | Goods or Services Covered |
|---|---|---|
| 23% | Standard | All remaining goods and services |
| 13.5% | Reduced (First) | Certain foods; Pharmaceutical products (certain); Children’s car seat; Social housing; Renovations and repair of private dwelling; Cleaning in private households; Particular agriculture supplies; Medical and dental care; Collection of domestic waste; Treatment of waste and wastewater; Minor repairs of bicycles; Shoes and leather goods and household linen; Supplies of electricity, natural gas, and district heating; Heating oil; Firewood; Construction work on new buildings; supply of immovable property; Particular social housing; Supply of immovable property; Routine cleaning of immovable property; Tourism services; Health studio services; Photography services; Services supplied by jockeys; Works of art and antiques; Short term hire of certain passenger vehicles’ Driving schools; Services supplied by veterinary surgeons; Cut flowers and plants for decorative purposes; Concrete and concrete blocks; Certain books; Admission to amusement parks; Hotel accommodation; Restaurant and catering (excluding beverages); Take away food; Hairdressing; Bars and cafes. |
| 9% | Reduced (Second) | Particular foodstuffs; Newspapers and periodicals; Use of sporting facilities; Admission to cultural events; Hairdressing; e-books and digital publications. |
| 4.8% | Super- Reduced | Livestock used in food production; Certain agriculture supplies |
| 0% | Zero | Particular foodstuffs; Undecorated wax candles; Particular animal feed and fertilizers; Certain food supplies for food production; Particular medicines for human consumption; Veterinary medicine (excluding those for pets); Particular feminine hygiene products; Certain medical equipment; Clothing and footwear for children; Intra-community and international transport; Cut flowers and plants for food production; Seeds and plants used in food production; Some books; Children’s nappies. |
What Is the 13.5% VAT Rate in Ireland?
As stated above, the standard VAT rate in Ireland is 23%. However, certain services and goods have reduced VAT rates. A reduced VAT rate is a lower rate of Value-Added Tax (VAT) applied to specific goods and services.
The 13.5% VAT rate in Ireland is a reduced rate that applies to particular goods and services mentioned above. The reduced rate of 13.5% is designed to support particular sectors of the economy and make essential goods and services more affordable for consumers. By applying a lower rate of VAT, the government aims to encourage spending in these areas and support economic activity.
Furthermore, there are three reduced rates in Ireland: 13.5% and 9%, with a super reduced rate of 4.8%. Additionally, Ireland also has certain zero-rated goods that must be reported on your VAT return, despite no VAT being charged.
First Reduced VAT Rate (13.5%)
The 13.5% reduced VAT rate applies to fuel, electricity, veterinary fees, construction services, arts and theatre tickets, cleaning services, and catering and restaurant services.
Second Reduced VAT Rate (9%)
The second reduced VAT rate of 9% applies to e-books, newspapers, facilities for sporting activities, and digital publications.
Super-Reduced VAT Rate (4.8%)
This super-reduced VAT rate is applied to livestock. In Ireland, zero-rated goods and services include books, certain foodstuffs, exports, children’s clothing and shoes, and disability aids.
VAT on Electricity Ireland
In Ireland, the VAT rate on gas and electricity was initially set at 13.5%. However, due to economic measures outlined in the Budget 2024, this reduced VAT rate of 9% has been extended for an additional 12 months. This means that the lower rate will remain in effect until 31 October 2024.
The extension aims to provide financial relief to consumers by keeping the VAT on these essential services lower than the standard rate. Electricity is a significant expense for both residential and commercial users, and the application of reduced rates reflects its importance. This measure supports economic stability and ensures that energy costs do not become prohibitively high, which could have broader economic applications.
VAT on Food Ireland
The VAT rate for food and drink for human consumption varies depending on the type of food or drink. Different rates apply based on the specific item.
Bread can be subject to either a zero rate or a reduced VAT rate. Moreover, bread that fits the ingredient definition under VAT legislation is taxed at a zero VAT rate.
Bread products like garlic bread, onion bread, and fennel bread typically do not meet the VAT legislation’s ingredient definition for bread. As a result, these specialty bread items may be subject to the reduced VAT rate rather than the zero VAT rate applied to standard bread. This means they may incur a VAT charge of 13.5%, instead of no VAT, reflecting their classification as a different category under VAT rules.
Additionally, bakery products that are flour or egg-based are subject to VAT at a reduced rate. Meanwhile, the supply of alcohol products is subject to VAT at the standard rate, which is 23%. However, certain alcohol supplies are subject to special rules, including:
- When they are held or transported under a duty suspension arrangement.
- On importation from outside the European Union (EU).
- When coming from another EU Member State where excise duty has been paid in the country of the dispatch.
- Distance sales to private individuals in Ireland.
VAT-Free Silver Ireland
Importing silver without adequate knowledge can lead to a huge tax bill, which might hurt your investment return. Many investors are unaware that importing silver into Ireland incurs a VAT of up to 23%. This huge tax burden cannot be recovered or refunded upon selling your silver bullion, so it’s best to avoid incurring this VAT charge from the start.
Hence, the question is; how can an Irish resident legally purchase silver without paying VAT? In fact, you can legally avoid the unnecessary tax burden on your silver investment by buying silver bullion through a qualified dealer who follows a legal and tax-compliant process. Let me break it down for you:
Legal Purchase: Ensure you buy silver bullion through a dealer who adheres to legal and tax regulations.
Tax Compliance: Choose a dealer who operates in a way that complies with tax laws to ensure the transaction is VAT-exempt.
Hospitality VAT Rate Ireland
In Ireland, the VAT rate for certain goods and services in the tourism and hospitality sector was increased from 9% to 13.5% effective from 1 September 2023. The VAT increases affect various goods and services, including:
- Hairdressing services;
- Certain food and beverages sold in restaurants, takeaways, and catering establishments;
- Admission to attractions like cinemas, museums, and exhibitions;
- Hotel, guesthouses, and similar accommodation.
The 9% VAT rate was initially introduced on 1 November 2020 to support these sectors during the COVID-19 pandemic. The government has extended this lower rate multiple times, but it was decided that there would be no further extensions beyond 31st August 2023. Certain areas remain unaffected by this increase.
Furthermore, supplies of printed matters like magazines and periodicals, as well as sporting facilities provided by profit-making entities, continue to qualify for a 9% VAT rate. Additionally, goods and services subject to other VAT rates will not be impacted by this change.
VAT on Diesel Ireland
On average, individuals spend hundreds of euros each month on petrol, diesel, or oil. However, it’s worth noting that fuel is also subject to taxation in Ireland. All types of fuel, including petrol, oil, and diesel, have VAT included in their retail price.
Now, this leads to a question, what is the VAT rate for diesel fuel in Ireland? Recently, the Irish government raised diesel rates following the EU’s ban on Russian oil imports. Prior to this, in 2021, the VAT on diesel has been increased from 21% to 23%.
At the beginning of 2023, a new charter was established that altered the excise rates for diesel, raising them by 7%. However, it is crucial to note that excise rates and VAT are different taxes.
Although both are taxes, they operate independently of each other. Currently, there have been no changes to the Value-Added Tax (VAT) rate for diesel, which remains at the standard rate of 23%.
Is there VAT on Cans of Coke?
Yes, there is VAT on cans of Coke and other similar beverages. They are typically taxed at the standard rate of 23%. This rate applies to most soft drinks and other non-essential beverages, reflecting the government policy to tax luxury and discretionary items.
| Types of Drinks | Hotels, Restaurants, Pubs, Canteens, Vending Machines | Retail/Wholesale |
|---|---|---|
| Alcohol | 23% | 23% |
| Bottled Water | 23% | 23% |
| Soft Drinks | 23% | 23% |
| Sport Drinks | 23% | 23% |
| Vegetable Juices | 23% | 23% |
VAT Exempt Ireland
Certain goods and services in Ireland are exempt from VAT. This means that no VAT is charged on these items, and businesses providing them cannot reclaim VAT on their inputs related to these exempt activities. Simply put, if a taxable person only supplies exempt goods and services, they generally are not entitled to register for Value-Added Tax (VAT).
Examples of VAT-exempt services include educational, medical, and financial services. The VAT exemption also includes the following examples:
- Postal services
- Supply of water and electricity imports
- Healthcare including hospitals, nursing homes, dentistry, and optical services
- Social welfare supplied by NGOs
- Supply of cultural services and goods
- Sports facilities and associated educational programs
- Services for the care and schooling of children or young people
- Funeral services
- Letting property ( though VAT may apply to holiday rentals and other similar accommodations)
- Core banking services, insurance, fund management, dividends, shares, and other investment securities
Unlike zero-rated goods, where VAT is charged at a rate of zero, VAT exemption means you are entirely outside the VAT system. Furthermore, if you only deal in exempt goods and services, you are not eligible for VAT registration, meaning you cannot claim VAT relief on your business purchases.
How much is VAT in Ireland?
As of 2024, the standard VAT in Ireland is 23%. The standard rate is crucial for generating substantial revenue for the government. There are also reduced rates; a 13.5% rate for certain goods and services, and a 9% rate for specific sectors like tourism and hospitality.
Furthermore, Irelan also has a super-reduced VAT rate of 4.8%. Additionally, there are some zero-rated goods, which must be reported on your VAT return even though no VAT is charged. Some goods and services may be exempt from VAT entirely.
What does VAT stand for?
The term VAT stands for Value-Added Tax, which refers to a consumption tax imposed on the value added to goods and services at each stage of their production or distribution. Businesses collect VAT on their sales and purchases, with the difference sent to the tax authority. This system ensures that tax is levied only on the value added at each stage, rather than the entire sales price.
The VAT is used globally, including within the European Union, where it is regulated by directives that member countries must follow. Each country has its own VAT rates and regulations within the framework provided by these directives. Furthermore, the VAT system helps generate revenue for governments while providing a transparent and fair method of taxing consumption.
What are the 13.5% VAT rates for in Ireland?
In Ireland, the 13.5% VAT rate, a reduced rate, primarily applies to various services in sectors such as agriculture, cleaning, and construction, as well as car rentals. The 9% VAT rate, another reduced rate, is mainly used for the tourism sector, and the catering industry. Additionally, a 4.8% VAT rate is designated for livestock, including animals and greyhounds.
Is there VAT on alcohol in Ireland?
Yes, there is VAT on alcohol in Ireland. Alcohol products are subject to the standard VAT rate, which is 23%. However, certain special rules apply to the supply of alcohol products, such as when they are held or transported under a duty suspension arrangement, on importation from outside the European Union, from another EU Member State where excise duty has been paid in the Member State of dispatch, and for distance sales to private individuals within the state.
In conclusion, understanding the various VAT rates and their application is crucial for both consumers and businesses in Ireland. Moreover, knowing the different VAT rates, exemptions, and the specific goods and services subject to VAT helps individuals and businesses stay compliant and make better financial decisions. The VAT system in Ireland is structured to be thorough yet flexible, adapting to the evolving economic conditions of the country.