Irish Government announces extension of 9% VAT rate

The Minister for Finance Paschal Donohoe has announced the extension of the 9% VAT rate for the tourism and hospitality industry for a further six months.

This extension will cover the same goods and services as the original measure, therefore hairdressing services are included. The 9% rate will now remain in place until 28 February 2023.

“The 9% VAT rate was introduced in response to the challenges posed by Covid-19 to support the hospitality sector and today the Government has decided to extend the period when the 9% rate will apply for a further six months,” said Minister Donohoe.

“This will provide further support to the tourism and hospitality sectors over the busy November/December period and into the early New Year.”

Originally, the 9% rate for these industries was reintroduced in Budget 2021 from 1 November 2020 to 31 December 2021 at an estimated cost of €401m.

This measure was initially extended in Budget 2022 to 31 August 2022 at a further estimated cost of €251m.

The Government said that no further extension to this measure is envisaged, so the 13.5% rate will apply to these sectors from 1 March 2023.