Written answers
Thursday, 28 February 2019
Department of Finance
VAT Rate Application
Maurice Quinlivan (Limerick City, Sinn Fein)
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22. To ask the Minister for Finance if the basis for the charging of VAT on service charges that are intended for the benefit of staff only will be examined; and if he will make a statement on the matter. [9851/19]
Paschal Donohoe (Dublin Central, Fine Gael)
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Irish VAT legislation is governed by the EU VAT Directive and in accordance with the VAT Directive any amount which a supplier is entitled to receive forms part of the taxable amount. Therefore, where a restaurant, hotel, etc. presents a bill for a meal or any other service, all charges included are liable to VAT. This includes an amount or percentage in respect of a service charge regardless of whether the service charge is intended for the benefit of staff only. However, a voluntary payment (such as a staff tip) which is not included in the bill is outside the scope of VAT.
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