Brian Stanley (Laois, Independent)
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263. To ask the Minister for Finance to consider changing the VAT rate for boarding kennels and catteries as the rate is currently 23%, whereas the rate for groomers and veterinary work is 13.5%; and if he will make a statement on the matter. [2582/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The VAT rating of goods and services is subject to the requirements of EU VAT law, with which Irish VAT law complies. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within 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.

The provision of boarding kennels and catteries and the services of groomers are not included in Annex III and as such these services are subject to the standard rate of VAT, currently 23%. There is no discretion under the Directive for Ireland to apply a reduced rate of VAT to these services.

However, the Directive allows for a Member State’s historic VAT treatment to be maintained under certain strict conditions. On this basis, Ireland has retained its long-standing application of its reduced rate, currently 13.5%, to the supply of services by a veterinary surgeon in the course of their profession. Where a veterinary surgeon carries out a grooming service as part of a veterinary procedure, such as treating an illness or disease, the grooming is considered part of the veterinary procedure and the entire procedure is liable to VAT at the reduced rate. Where a veterinary surgeon provides a grooming service as a supply that is distinct from a veterinary procedure, the service is liable to VAT at the standard rate of 23%.

Erin McGreehan (Louth, Fianna Fail)
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265. To ask the Minister for Finance the number of categories currently subject to each of the reduced VAT rates of 9% and 13.5%; the number of additional categories which may become subject to either of the reduced VAT rates on foot of proposals in the Programme for Government; and whether there is a limit on the number of categories which may be subject to each, or both, of the two reduced VAT rates. [2718/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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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 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. Following revisions in 2022 Annex III has thirty three categories to which a reduced rate may be applied. Member States may apply a reduced rate to a maximum of twenty four of these categories. Ireland currently applies a reduced rate to twenty of these categories. Three of these categories currently have a 9% VAT rate applied.

Ireland maintains two reduced rates, a reduced rate of 13.5% and a second reduced rate of 9%. The Directive allows any of these categories to have any reduced rate applied. A reduction from a 13.5% VAT rate to a 9% VAT rate would not affect the limit of 24 categories to which a reduced VAT rate can apply.

The Directive also allows for a Member State’s historic VAT treatment to be maintained under certain strict conditions outside of Annex III. One of the conditions applied in these cases is that the rate applied under the historic arrangement is ‘parked’, which means that EU law prohibits it being reduced below 12%.

As the Deputy will be aware, in making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework. All decisions in relation to changes to VAT rates, including the full scope of any reduction, will therefore be made in line with this framework.