Shane Cassells (Meath West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

74. To ask the Minister for Finance if he will extend the 9% VAT rate available in the hospitality sector to owners of beauty salons who at present are excluded from this measure and are therefore at a competitive disadvantage to others in their industry who can avail of the lower VAT rate; and if he will make a statement on the matter. [29313/16]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

VAT is charged on the supply of goods and services, and the rate applying is subject to the requirements of EU VAT law with which Irish VAT law must comply.  While most tourist related services are subject to the 9% reduced VAT rate, it is not possible to extend this treatment to all tourist activity, such as beauticians working in the tourism industry.

While hairdressing services apply at the 9% rate, services consisting of the care of the human body, including beauticians, are subject to the 13.5% rate.  This arises from the fact that many of goods and services to which Ireland applies a reduced rate of VAT, including services related to care of the human body, have their basis under an EU derogation that provides that as Ireland applied a reduced rate to these items on 1 January 1991, we are entitled to continue applying that reduced rate to those items.  However, this is conditional on the rate being no less than 12%.  These are known as parked items, and are provided for under Article 118 of the EU VAT Directive.  As the services provided by beauticians are part of these parked items, it is not possible for Ireland to apply the rate of 9% to them.