Robert O'Donoghue (Dublin Fingal West, Labour)
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297. To ask the Minister for Finance the consideration his Department has given to introducing tax relief on sporting membership fees to improve affordability for individuals and families, and to reducing VAT on sport and exercise classes in order to encourage broader participation in physical activity and recreational sports. [22769/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy will be aware, the Programme for Government, Securing Ireland’s Future, includes a commitment to “Consider measures, in conjunction with the Department of Finance, to encourage gym membership and active participation in sport and exercise.”

The Programme for Government also acknowledges that “sport holds a special place in Irish life and society promoting health and wellbeing, encouraging community participation and instilling a sense of pride in our people”

This can be achieved through a variety of means including increased participation, education, increased funding, supporting high performance and governance.

In relation to the commitment to consider measures to encourage gym membership and active participation in sport and exercise, officials in the Department of Finance will consider the matter over the coming months with the expectation that an update of the examination will be provided as part of the annual Tax Strategy Group process during the summer.

Specifically in relation to VAT, following changes to the VAT Directive in 2022 a Member State may apply a reduced rate to the supply of sport or physical exercise classes. However no decision was made in previous budgets to reduce the VAT rate on sports and fitness classes.

It should be noted that there would be challenges in determining how it would be defined in such a way as to avoid one type of activity having an advantage over another and thus be in breach of the principle of fiscal neutrality. For instance it would be challenging to provide a reduction on the basis of age or type of class.

The Deputy should also note that when sports or fitness classes are provided by companies or sole traders who are not registered for VAT because they operate below the VAT registration threshold no VAT is charged.

Furthermore, as with other VAT rate reductions, while the VAT charged must always be correct a company can increase the base price of the service so that the final consumer does not benefit from such a reduction.

In line with best practice and as with all proposals for the introduction of new tax measures or the amendment of existing tax reliefs, the proposal to encourage gym membership and active participation in sport and exercise through the tax system must be assessed in accordance with the Department of Finance’s Tax Expenditure Guidelines.

Any decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to available resources and the sound management of the public finances.

I would also like to take this opportunity to note that the tax code already provides for a number of fitness based measures more generally. For example, the Cycle to Work Scheme provides that bicycles and associated safety equipment provided by employers to employees will be treated as a tax exempt benefit-in-kind subject to certain conditions being met. One of the benefits envisaged from the scheme was that more people cycling to and from work would improve health and fitness levels.

In addition, the Accelerated Capital Allowances scheme for Childcare Facilities and Fitness Centres encourages employers to develop childcare facilities and fitness centres onsite for their employees. The scheme provides accelerated allowances for qualifying buildings or structures over a seven-year period and accelerated allowances for related equipment at 100 per cent in year one.