The Standard, Reduced, and Zero Rate VAT rates in Ireland are elucidated.
The knowledge of VAT (Value Added Tax) rates in Ireland is crucial for businesses, freelancers, and consumers. Ensure that the correct VAT rate is applied to all transactions, including invoices, returns, and expenses.
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We’ll outline the standard VAT rates in Ireland, as well as their applicable categories of goods and services by 2025.
What Is VAT in Ireland?
VAT is a tax that is levied on the sale of goods and services. Businesses in Ireland can recover VAT paid on allowable business expenses by collecting it from the Revenue Commissioners.
Three main VAT rates are available in Ireland:
- Standard Rate – 23%
- 13.5% and 9% reductions were recorded.
- Zero Rate – 0%
1. Standard VAT Rate – 23%
VAT in Ireland is the most common rate, at 23%. Unless explicitly stated in the reduced or zero rate description, it applies to all goods and services.
Items that are subject to a 23% charge:
- Consumer electronics
- Shoes and apparel (not suitable for kids)
- Professional services (e.g, legal, consulting)
- Furniture and homeware
- Cosmetics and beauty products
For the most accurate classification, use Revenue.ie to determine if an item falls below the standard rate.
2. Reduced VAT Rates of 13.5% and 9%
13.5% Reduced VAT Rate
This rate usually applies to goods and services that are deemed necessary or encourage economic growth within the region.
Examples include:
- Building and construction services
- Short-term accommodation (e.g, hotels, B&Bs)
- Hairdressing services
- Fuel and energy supplies
- Repair and maintenance services
9% Second Reduced Rate
A specific list of items, such as tourism and publishing, are still receiving support from the 9% rate that was introduced.
Examples include:
- Newspapers and printed materials
- Restaurant and catering services
- Free admission to cinemas, museums, and exhibitions
- Hotel and tourism-related services
VAT rates are subject to change during any budgetary announcement or economic relief period. Please take note: Always verify the rate for your specific industry.
3. Zero VAT Rate – 0%
Despite being zero-rated, goods and services are not subject to VAT taxation at 0%, but businesses can recover VAT on associated expenses.
Common examples of zero-rated items:
- Children’s clothing and footwear
- Books and educational materials
- Common foods (such as bread, milk, and veg)
- Non-EU country exports
- Medical devices and certain medications
A significant advantage is that zero-rated items, while not being taxed on VAT, allow businesses to claim input VAT.
What Distinguishes VAT-Exempt from Zero-Rated?
Many people mistake zero-rated goods for VAT exempt services, but there’s a noticeable contrast.
- Zero-Rated: VAT is not charged, but it can be reclaimed as input VAT.
- Exempt: No VAT is levied and the VAT cannot be reclaimed.
Examples of exempt services:
- Financial and insurance services
- Healthcare and medical consultations
- Education and training services
Why Understanding VAT Rates Matters
It’s important to apply the correct VAT rate, not just for compliance:
- Accurate pricing and quoting
- Transparent invoicing
- Avoiding over- or undercharging customers
- Keeping accurate records of VAT input
- Filing correct VAT returns
Final Thoughts
VAT rates in Ireland are easy to navigate. Knowing which products and services are classified as standard (23%), reduced (13.5% / 9%) or zero (0%) VAT rate can aid in accurately managing the VAT for your business or personal finances.
Keep up with Revenue’s official resources, and seek guidance from a qualified tax advisor on complex VAT matters when needed.
Need help calculating VAT?
Read our blog: Tips and Tools for Correctly Computing VAT in Ireland