Ruth Coppinger (Dublin West, Solidarity)
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273. To ask the Minister for Finance if he has examined the viability of having the same VAT rate for hairdressing and beauty services; and if he will make a statement on the matter. [6298/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Deputy should note that at present the VAT rate for hairdressing and beauty services is 13.5%. This is the higher of the two reduced VAT rates, which Ireland currently avails of. The other reduced rate is 9%.

However, the basis for the 13.5% rate differs for both services.

In relation, to hairdressing the EU VAT Directive, with which Irish VAT Law must comply, contains provisions under Annex III, which allows for a reduced rate of VAT on specific goods and services. Hairdressing is included in Annex III thus enabling the reduced rate to be applied to these services. However, beauty salons are not listed in Annex III, and therefore under EU law a reduced rate cannot be applied to them.

However, because of a historical derogation, beauty services are subject to the reduced rate of 13.5%. This arises from the fact that many of the 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 the aforementioned 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 as the services provided by beauticians are part of these parked items, it is not possible for Ireland to apply the reduced rate of 9% to them. This restriction does not however apply to hairdressing services due to them being covered by Annex III of the VAT Directive.