Ireland l 2019 Budget Brings Changes in Scope of the 9% VAT Rate in Tourism and Digital Publishing Sectors

The Irish 2019 budget statement was released on 9th October 2018 and it has provided for the following proposed changes to the application of Irish VAT rates.

These are expected to come into effect as of 1st January 2019:

  • The VAT rate for activities in the tourism and hospitality sectors will rise to 13.5% from 9%. Now, the 9% rate applies to various goods and services which include, subject to certain conditions, hotel lettings and similar services, catering services, admission to cultural events such has cinemas and concerts, hairdressing, and supplies of live horses and greyhounds. This second reduced VAT rate of 9% was introduced to Ireland in 2011 as a temporary measure only and will generally be withdrawn except in relation to the supplies detailed below.
  • The VAT rate on digital publications such as e-books and electronically supplied newspapers will be lowered to 9%. Currently, they are subject to the standard 23% rate.

 

Supplies of newspapers and sports facilities will remain subject to the 9% rate of VAT.

 

This hike in supplies being taxed at the 13.5% rate is expected to raise an extra EUR 560 million of revenue for the Irish tax authorities.