9% VAT Days Numbered

The Department of Finance plans to end the reduced rate of VAT of 9% for tourism and hospitality on its expiry date next February, according to research papers released ahead of the Budget.

The document is not Government policy, however, and an extension of the preferential VAT rate remains a possibility. 

The hospitality VAT rate had been reduced from 13.5% to 9% and was subsequently extended by a further six months to take account of the inflation crisis facing many businesses still reeling from the shock of the Covid-19 pandemic.  

Extending the 9% rate for the further period cost the exchequer an extra €250m, but "no further extension to this measure is envisaged, so the 13.5% rate will apply to these sectors from March 1, 2023", the Department said in the documents discussing potential options for tax measures in the budget.