Fergus O'Dowd (Louth, Fine Gael)
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61. To ask the Minister for Finance further to Parliamentary Question Nos. 89, 91, 107, 131 and 142 of 16 June 2020, if he will consider reducing the VAT on yoga services to the permissible 12% under the requirements of the EU VAT directive in order to assist yoga studios nationwide post-Covid-19; and if he will make a statement on the matter. [13355/20]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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77. To ask the Minister for Finance the reason gyms are paying a 9% VAT rate while yoga studios pay a 13.5% rate; the supports he will put in place to help yoga studios reopen in view of the reduction in class sizes that will be necessary to maintain physical distancing; and if he will make a statement on the matter. [13644/20]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 61 and 77 together.

The VAT rating of goods and services is subject to the requirements of the EU VAT Directive, with which Irish VAT law must comply. Under the Directive, Ireland can and does apply a reduced rate of VAT, currently 13.5%, to supplies by yoga studios. The Directive does not permit the application of a rate below 12% to the supply of such services.  Ireland has a second reduced rate of 9% and a further reduced rate is not permitted under the Directive. Therefore, while it is permissible to reduce the rate of VAT on yoga services from 13.5% to 12%, this could only be done if either the 13.5% or 9% rate was discontinued.

Gym membership fees are considered to be the right of admission to facilities for taking part in sporting or physical education activities. The Directive permits the application of a rate of not less than 5% for such services, and accordingly the second reduced rate of VAT, currently 9%, has been applied to gym membership fees. Where separate charges apply in respect of training classes, for example aerobic classes supplied in a gym, these charges are liable at the reduced rate of VAT, currently 13.5%.

Yoga studios may be eligible for financial support under the Temporary Wage Subsidy Scheme (TWSS).  That scheme was legislated for in section 28 of the Emergency Measures in the Public Interest (Covid-19) Act 2020, an emergency measure to deal with the impact of the Covid-19 pandemic on the economy. Detailed information is available on the Revenue website in relation to this scheme.