New VAT Rates in Ireland 2020

Value Added Tax (VAT) is a tax charged on the sale of most goods and  services in Ireland

VAT is charged at different rates for various goods and services.
These are the current VAT rates in Ireland that are in place for 2020  .

(Updated with July Stimulus changes )

Standard rate of VAT.

There is a temporary reduction to the standard rate of VAT from September 1st 2020 until the end of February 2021.
The rate is being cut from 23% to 21% as part of the Government July stimulus package.

(See the end of the article for more details of this temporary VAT reduction.)

The standard rate of VAT applies to a wide range of goods and services including, for example, the sale of motor vehicles, adult clothing, electrical goods, petrol, diesel, alcohol and tobacco, most household goods, non-basic foodstuffs, many professional services and telecommunications.

All goods and services that do not fall into the reduced rate categories are charged at the standard rate. See below for details of reduced VAT rates.

13.5%  :  This rate of VAT is charged on items including

  • fuel (coal, heating oil, gas, electricity. (It is 5% in the UK)
  • vet fees,
  • building and building services,
  • agricultural contracting services,
  • short-term car hire,
  • cleaning and maintenance services.
  • Catering and restaurant supplies, including vending machines and take-away food (excluding alcohol and soft drinks sold as part of the meal)
  • Food Supplements
  • Hotel lettings, including guesthouses, caravan parks, camping sites etc
  • Short term accommodation .
  • Cinemas, theatres, certain musical performances, museums, art gallery exhibitions
  •  Fairgrounds or amusement park services
  •  Hairdressing services.

9% is a special reduced rate of VAT for

  • newspapers
  • Facilities for taking part in sporting activities including green fees charged for golf and subscriptions charged by non-member-owned golf clubs.
  • electronically supplied publications

More here on the 9% VAT Rate

4.8% is a rate of VAT specifically for agriculture.

It applies to livestock (excluding chickens), greyhounds and the hire of horses.

0% (Zero) VAT 

  • Most food including Tea, coffee, milk, bread, butter, cheese , milk , vegetables, meat, etc.
    • Not food supplied from a vending machine or in the course of catering.
    • NOT food supplements such as  slimming or sports supplements and protein supplements.
  • Books, children’s clothes and children’s shoes,
  • Oral medicine for humans and animals,
  • Vegetable seeds and fruit trees, fertilisers, large animal feed,
  • Disability aids such as wheelchairs, crutches and hearing aids.
  • All exports,

VAT Exempt :

There is no VAT on financial, medical or educational services.
VAT is not charged on live theatrical and musical performances except those where food or drink is served during all or part of the performance.

In Ireland – you can buy goods from outside the EU up to a value of €22 without incurring any VAT charges

Temporary VAT Rate of 21%

As mentioned earlier – the standard rate of VAT will be temporarily cut from 23% to 21% from September 1st 2020 until the end of February 2021.
This will affect VAT on many items such as motor vehicles, adult clothing, electrical goods, petrol, diesel, alcohol, tobacco, most household goods, non-basic foodstuffs, many professional services and telecommunications.

Retailers can decide whether or not they are going to pass on the VAT cut to customers and reduce their prices by two per cent or keep prices the same and keep the 2% themselves.
We did a quick check on Amazon and they are passing on the VAT decrease for Irish customers.

In general, goods and services supplied before 1 September 2020 will be liable to VAT at the rate at the time of supply, namely 23%.
However, where goods and services are supplied in August 2020 by a trader who is obliged to issue a VAT invoice, and that trader issues the invoice after 31 August 2020, the rate in place in September applies, namely 21%.

Credit or Debit Notes :

Any VAT credit note or debit note relating to a supply of goods or services, which contains a VAT adjustment, should show VAT at the rate in place at the time the original invoice was issued. For example, if goods are supplied in August 2020 and a credit note is issued in September 2020 (due perhaps to an adjustment in the price of the goods or services), the rate of VAT on that credit note is 23%. This is because the goods or services were supplied when the rate of VAT was 23%.

VAT rates in the UK

In the UK – the standard VAT rate is 20%
There is a 5% VAT rate on home energy , children’s car seats
There is Zero VAT on most food and children’s clothes in the UK

VAT Rates in Ireland 2020

Share This

3 thoughts on “New VAT Rates in Ireland 2020

  1. If we have issued an invoice in July 2020 for services provided from 1st July to 30th September, is the VAT rate 23% or should it be calculated pro-rata between the two rates?

Comments are closed.