Neale Richmond (Dublin Rathdown, Fine Gael)
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166. To ask the Minister for Finance if he will consider reducing the VAT rate on medication for domestic animals to 13.5% to match the rate for farm animals; and if he will make a statement on the matter. [49367/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law must comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within the categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT. Currently, Ireland has a standard VAT rate of 23% and two reduced rates of 13.5% and 9%. Ireland is also permitted to retain some historic VAT arrangements, under strict conditions.

As one of the historic VAT arrangements, Ireland has been permitted to retain the zero rate for the supply of oral medicine for animals, such as farm animals but excluding domestic pets, such as dogs and cats. The supply of medicine for domestic pets is liable to VAT at the standard rate.

As part of Ireland’s normal annual Budget and Finance Bill preparations, various options for tax policy changes were considered by the Tax Strategy Group as part of the Budget and Finance Bill cycle. However, after considering the various options, and the associated costs, I decided to confine the reduction in VAT to a limited number of specific areas as outlined in my budget speech. The areas in question do not include a reduction of VAT on medication for domestic animals at this time.