9% VAT to End in February

The special VAT rate of 9% applicable to tourism and hospitality is to end on 28th February 2023, the Minister for Finance has announced.

In the course of his Budget speech, Minister Paschal Donohoe said, "As I have previously stated, the 9% VAT rate which is currently in place to support the tourism and hospitality sectors will continue until 28 February 2023."

The end of the 9% VAT regime was clearly signalled by Government in recent weeks despite lobbying by industry organisations for its retention.  The move must also be seen in the context of rising hotel room rates in Dublin and prime tourism locations.

Also in the Budget, the Minister for Public Expenditure Michael McGrath announced the provision of €50 million for further Business Continuity Supports and €39 million for Enhanced Tourism Marketing & Product Development. The Arts and Culture Sector will benefit from a Pilot Basic Income Guarantee Scheme for Artists and €25 million for the continuation of Live Entertainment supports. 

Minister Donohoe said that the government is committed to supporting the night time economy – not just our hospitality sector, but also the many musicians, venues, event operators and organisers who are integral to creating a vibrant cultural life.

"In line with a commitment in the Programme for Government to modernise our licensing laws, I am today announcing that we will halve the cost of applying for a Special Exemption Order, which late night venues require in order to open. This will reduce the excise fees for a special exemption application order from €110 to €55.

"This aligns with a number of measures we have taken to support the night time economy, ahead of longer term reforms which will be announced when the General Scheme of the Sale of Alcohol Bill is published within weeks."

Minister McGrath said that the Tourism, Culture, Arts, Gaeltacht, Sports and Media sectors have been particularly hard hit by COVID-19.

"The upcoming easing of restrictions will assist these sectors. However, I am conscious further support will be required to underpin their recovery. In this regard, I am providing €50 million for further Business Continuity Supports and €39 million for Enhanced Tourism Marketing & Product Development. The Arts and Culture Sector will benefit from a Pilot Basic Income Guarantee Scheme for Artists and €25 million for the continuation of Live Entertainment supports."