Tuesday, 13 October 2020
Financial Resolution No. 3: Value Added Tax
(1) THAT the rate of value-added tax on the supply of certain goods and services at present chargeable at the rate of 13.5 per cent be decreased to 9 per cent of the amount on which tax is chargeable in relation to the supply of certain goods and services from 1 November 2020 to 31 December 2021 and that accordingly, subsection (1)(ca) of section 46 of the Value-Added Tax Consolidation Act 2010 (No. 31 of 2010) be amended to extend the application of the rate of 9 per cent to goods or services of a kind specified in paragraphs 3(1) to (3), 7(b) to (e), 8, 11 and 13(3) of Schedule 3 to that Act.
(2) THAT this Resolution shall have effect on and from 1 November 2020.
(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).
Financial Resolution No. 3 provides that certain goods and services that are currently liable to VAT at 13.5% will be subject to a VAT rate of 9% from 1 November 2020 until 31 December 2021. This will mainly affect the supply of restaurants and catering services, guest and holiday accommodation and various entertainment services such as admissions to cinemas, theatres, museums, fairgrounds and amusement parks.
VAT at 9% will also apply to hairdressing and certain printed matter such as brochures, maps, programmes and magazines. Newspapers and sporting facilities that were already at 9% will be maintained at that level.
The total cost of this measure is estimated to be €401 million for the 14 months it is to be introduced. It is estimated that it will cost €336 million in 2021, with a further €65 million in 2022. The measure is being introduced in the context of the unprecedented challenges facing this sector, within which many businesses remain closed for now, and those that are open are operating at significantly reduced capacity.
The reduced rate is provided for until December 2021 to support businesses throughout 2021 when, hopefully, our economy and our society can start to return to some form of normality.