The ECJ has ruled against Ireland's application of a reduced VAT rate on supplies of horses and greyhounds in a judgement issued on 14 March (Case C-108/11). Irish VAT law (under section 46(1)(d) VATCA 2010) provides for the application of a reduced rate of VAT at 4.8% to the supply of live greyhounds and live horses and to the hire of horses.

Ireland fought the action brought by the EU Commission on the grounds that it complied with the provision under the VAT Directive which allows Member States to continue exemptions or reduced rates already in place at 1 January 1991. However, the EJC ruled that the Ireland did not meet the conditions necessary to continue use of the 4.8% VAT rate on supplies of horses and greyhounds.

Chartered Accountants Ireland understands that Revenue are currently considering the judgement and there are no immediate plans to make any amendments.

In 2008, the EU Commission issued infringement proceedings against Ireland. Ireland was referred to the ECJ on 24 November 2010. Five other member state including Austria, France, Germany, the Netherlands and Luxembourg have also been referred to the ECJ regarding their VAT treatment of horses.