PART 6 – RATES AND EXEMPTION

Overview

This Part contains 2 Chapters. Chapter 1 contains the provisions relating to rates of VAT. It sets out the rates of VAT that apply in the State and provides for rules on how supplies comprising elements that potentially attract VAT at different rates are dealt with. Special rating rules for works of art, for contract work and for other supplies are also included. Revenue’s power to make determinations as to tax rates in cases of doubt is also covered (sections 46 to 51).

Chapter 2 deals with exemptions. It provides that VAT will not be chargeable in respect of any exempted activity (section 52).

Chapter 1 - Rates

46. Rates of tax

Summary

This section sets out the rates of VAT that apply in the State. All goods and services, other than those specified as being exempt or liable at the zero, 9% or 13.5% rate, are liable at the standard rate of 23%. The only exceptions are supplies of livestock or greyhounds, which are liable at the livestock rate of 4.8%. Supplies liable at 0% are listed in Schedule 2; supplies liable at the reduced rates of 9% and 13.5% are listed in Schedule 3.

The section provides that the rate to be used is the rate in force when the tax becomes due and sets out the powers the Minister for Finance has to vary the two Schedules. An interpretation of the term “specified in the Schedules” is also given.

Details

(1) Subsection (1) lists the different rates:

(a) 23% on all taxable goods and services not covered by paragraphs (b), (c), (ca) or (d).

(b) 0% on all goods and services in Schedule 2.

(c) 13.5% on all goods and services in Schedule 3 except those goods and services to which paragraph (ca) applies.

(ca) 9% on all goods and services in paragraphs 7(a), 7A and 12 of Schedule 3.

(d) 4.8% on the supply of livestock and live greyhounds.

(2) Subsection (2) provides that the rate at which tax is chargeable in relation to the supply of goods or services is the rate in force on the date on which the tax in respect of the supply falls due. See Chapter 3 of Part 9 for more on due dates.

As a general rule, in dealings with another registered person the tax falls due on the date of issue of an invoice in respect of the transaction, and in dealings with an unregistered person the tax falls due on the date of the supply of the goods or services. Any payment in advance will trigger a charge to tax in respect of that payment.

(3) Subsection (3) clarifies the meaning to be given to the word “specified” in the context of goods or services being specified in a Schedule. The paragraph makes it clear that any goods or services that are specifically excluded from any paragraph of a Schedule are automatically excluded from every other paragraph of that Schedule and are not regarded as specified in the Schedule.

(4) The Minister may, by order, vary Schedule 2 or 3 by adding or deleting any goods or services from the lists. He or she may not, however, increase the rates or extend the classes of activities in the Schedules by way of order – this must be done by way of Budget Resolution and Finance Act. Ministerial orders may be amended or revoked. A Ministerial order must be passed by Dáil Éireann within 21 days of the order being laid before the Dáil.

Relevant Date: Finance Act 2019