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Irish VAT Rates Guide
Value Added Tax (VAT) in Ireland is a crucial component of the nation’s tax system, introduced in 1972 with Ireland’s entry into the European Economic Community (now the EU). The standard rate has evolved over time, settling at its current rate of 23% in 2012 as part of Ireland’s response to the financial crisis. This rate places Ireland among the countries with higher VAT rates in the European Union, reflecting the tax’s importance in government revenue generation.
Irish VAT operates on a multi-tiered system designed to balance economic growth with social equity. The system acknowledges the varying impact of taxation on different sectors and consumer groups. For instance, essential items like food and children’s clothing carry a 0% rate to ensure basic necessities remain affordable, while luxury goods and services bear the full standard rate. This progressive approach helps maintain social equity while ensuring robust tax revenue.
For businesses, Irish VAT compliance involves a well-structured registration and reporting system. Companies must closely monitor their turnover against the registration thresholds: €75,000 for goods and €37,500 for services. Once registered, businesses are required to file regular VAT returns, typically every two months, through Revenue’s Online Service (ROS). This system has been progressively digitized, making Ireland’s VAT administration one of the more efficient in Europe.
The Irish VAT system also includes special provisions for different business sectors. The tourism and hospitality industry, for example, has seen various VAT rate adjustments over the years as an economic policy tool. These adjustments demonstrate how VAT rates can be used flexibly to support specific sectors during economic challenges or to stimulate growth in particular areas of the economy.
Below are the current VAT rates for different categories of goods and services in Ireland.
| Rate | Applies To |
|---|---|
| 23% (Standard) |
Most goods and services, including: – Electronics – Adult clothing – Professional services – Alcohol |
| 13.5% (Reduced) |
– Building services – Repair services – Photography – Restaurant meals – Hotel accommodation |
| 9% (Special) |
– Newspapers – Electronic newspapers – Sporting facilities – E-books – Periodicals |
| 0% (Zero) |
– Some retail food and drink – Children’s clothes and shoes – Oral medicine – Certain books – Exported goods |
| Exempt | – Financial services – Insurance – Medical services – Education – Postal services |
€75,000 – For sellers of goods
€37,500 – For service providers