A new second Reduced VAT Rate will be introduced with effect from 1 July 2011 in Ireland.
The Minister for Finance has announced that the second reduced VAT rate of 9% will be introduced for certain goods and services mainly in the tourist industry for the period 1st July 2011 to 31st December 2013.
The new 9% rate applies to restaurant and catering services; hotel and holiday accommodation; admissions to cinemas, theatres, certain musical performances, museums and art gallery exhibitions; fairgrounds or amusement park services; the use of sporting facilities; hairdressing services; printed matter such as brochures, maps, programmes, leaflets, catalogues and newspapers which have an impact on the tourist industry.
The new reduced rate of 9% covers the supplies of goods and services in the following categories:
- the supply of food and drink (excluding alcohol and soft drinks) in the course of catering or by means of a vending machine
- hot take-away food and hot drinks
- hotel lettings, including guesthouses, caravan parks, camping sites etc
- admissions to cinemas, theatres, certain musical performances, museums, art gallery exhibitions
- amusement services of the kind normally supplied in fairgrounds or amusement park services
- the provision of facilities for taking part in sporting activities by a person other than a non-profit making organisation
- printed matter e.g. newspapers, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books)
- hairdressing services (Note: beauty treatments:- for example, facials, massages, nail treatments, tanning or sun bed services etc., remain liable at the 13.5% rate).
The new reduced rate of 13.5% covers the following supplies of goods and services:
- bakery products, excluding bread
- residential property
- building services related to residential property, including installation
- routine cleaning of residential property
- minor repairs of bicycles, shoes or leather goods, clothing or household linen
- non-oral contraceptive products
- goods used for the agricultural production of bio-fuel
- agricultural services
- certain nursery or garden centre stock
- animal insemination services and livestock semen
- children's car safety seats
- waste acceptance and disposal services
- greyhound feeding stuff and live poultry and live ostriches
- fuel for power and heating, coal, peat, timber, electricity, gas (other than auto LPG), heating oil
- non-residential property
- building services related to non-residential property, including installation
- routine cleaning of non-residential property
- concrete
- tour guide services
- short-term hiring of cars, boats, caravans, mobile homes, tents or trailer tents
- repair and maintenance of cars, other vehicles, vessels and aircraft
- services consisting of the care of the human body
- jockey services
- photographic services including photographic prints
- car driving instruction
- veterinary services
- certain works of art, antiques and literary manuscripts
In general, goods and services supplied before 1 July 2011 are liable to VAT at the rate in force at the time of supply, which is 13.5%. However, where goods and services are supplied in June 2011 AND invoiced after 30 June 2011, the rate in force in July applies, that is 9%.
Remember, date is critical; a trader supplying goods and services should always apply the VAT rate in force at the time of supply.
Note, in general, any advance payment, including a deposit, received by a trader before 1 July 2011 is subject to VAT at the existing rate of 13.5%. However, where the trader is obliged to issue a VAT invoice for a payment, and the invoice is issued after 30 June 2011, the new rate that applies is 9%.
