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.
- 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%.