Introduction

A second reduced VAT rate of 9% applies in respect of certain goods and services for the period 1 July 2011 to 31 December 2013. The 9% rate applies to certain goods and services previously liable at the 13.5% rate, including 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. From 1 January 2014 the rate on these goods and services will revert to 13.5%.

Supplies of goods and services at the new 9% rate

• The goods and services to which the 9% rate applies are those, and only those, listed in paragraphs 3(1) to (3), 7, 8, 11, 12, and 13(3) of Schedule 3 of the VAT Consolidation Act 2010. Examples of such goods and services include:
• the supply of food and drink (excluding alcohol, soft drinks and bottled water) in the course of catering
• the supply, by means of a vending machine, of food and drink that would otherwise be zero-rated
• 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 parks
• the provision, by a person other than a non-profit making organisation, of facilities for taking part in sport
• printed matter e.g. newspapers, magazines, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books)
• hairdressing services (Note: beauty treatments:- for example, facials, nail treatments, tanning, sunbed services etc remain liable at 13.5%).

(See Appendix 1 for more detailed examples)

Supplies of goods and services remaining at the 13.5% rate

Goods and services listed in Schedule 3, except thosed listed in paragraphs 3(1) to (3), 7, 8, 11, 12, and 13(3) remain liable at 13.5%.

(See Appendix 2 for examples of goods and services remaining 13.5%).

What rate should the trader apply? – general rule

In general, goods and services supplied before 1 July 2011 are liable to VAT at the rate in force at the time of supply, namely 13.5%. However, where goods and services are supplied in June 2011, by a trader who is obliged to issue a VAT invoice, and that trader issues the invoice after 30 June 2011, the rate in force in July applies, namely 9%.

A trader supplying goods and services to private individuals should always apply the VAT rate in force at the time of supply.Although traders who account for VAT on the cash basis are not liable for VAT on their supplies until they receive payment, where they supply goods or services before 1 July 2011, but receive payment on or after 1 July 2011, they should account for VAT on those supplies at the 13.5% rate. Such traders should account for VAT at 9% on goods and services supplied on or after 1 July 2011.

Invoices

A VAT-registered person is obliged to issue a VAT invoice where a supply of goods or services is made to another VAT-registered person, a public body or an exempt person.

Where a VAT-registered person (who accounts for VAT on an invoice basis) is obliged to issue an invoice and that invoice is issued on or after 1 July 2011, the rate of VAT to be shown on the invoice is the rate in force at the time of issue of the invoice. This is so, even if the goods or services were supplied before that date.

Traders who account for VAT on a cash basis are not liable for VAT until they receive payment. However, where an invoice is issued before 1 July 2011 and payment will not be received until on or after 1 July 2011 the rate of VAT on that invoice is 13.5%.

Where a VAT-registered person is not obliged to issue a VAT invoice (e.g. in respect of a supply to a private individual), but chooses to do so, VAT liability is normally determined by the date of supply and not the date of issue of the invoice. Goods or services which are actually supplied to private individuals prior to 1 July 2011 are taxable at the 13.5% rate, even though they may be invoiced on or after 1 July.

Credit Notes

Any VAT credit note or debit note relating to a supply of goods or services which contains a VAT adjustment and which is issued to a VAT-registered person, a public body or an exempt person on or after 1 July 2011 should show VAT at the rate in force at the time the original invoice was issued.

Advance payments received before 1 July 2011

An advance payment, including a deposit, received from a VAT-registered person before 1 July 2011 in respect of goods or services not supplied until on or after that date, is subject to VAT at 13.5% if the invoice relating to that payment is issued, or required to be issued, before 1 July 2011. However, if the invoice relating to that payment is issued or required to be issued on or after 1 July 2011, the payment is taxable at 9%. In the case of traders accounting for VAT on the cash basis, an advance payment received before 1 July is taxable at 13.5%. Any advance payment received from an unregistered person is taxable at the 13.5% rate if received before 1 July 2011 and 9% if received on or after that date.

Contracts existing on 1 July 2011

Where a contract to supply goods or services is entered into before 1 July 2011, and the contract is not completed until after that date, the agreed VAT inclusive price may be subject to an appropriate adjustment due to the change in the VAT rate, unless there is agreement to the contrary between the contracting parties.

Contracts with fixed interval payments

When payments for continuous supplies, due at fixed intervals over an agreed time-frame, are invoiced and due before 1 July 2011, they should be treated as taxable at the 13.5% rate; where invoiced and due after 30 June 2011, they should be treated as taxable at the 9% rate. This applies even if the interval over which the supplies take place spans the time both before and after I July 2011.

Stock on hands on 1 July 2011

A trader who is registered for VAT on 1 July 2011 should account for VAT at the 9% rate on stock supplied after that date, even though they may have purchased their stock with VAT at the 13.5% rate before that date. Such traders will already have been entitled to a credit for VAT on the purchase of that stock, subject to the usual conditions.

Appendix 1

Provision of facilities for taking part in sport.

Examples of sporting facilities reduced from 13.5% to 9% rate-Section 46(1)(ca) – Schedule 3, paragraph 12

• Adventure centre admissions
• Boat hire with an operator for purpose of sport (fishing, diving etc)
• Bouncing castle hire
• Fishing and hunting rights on private land/waters
• Golf-green fees, driving range fees & hire of equipment incidental thereto.
• Gynasium – membership fees and provision of facilities
• Hire of football pitches/astroturf
• Swimming pool admission

Provision of facilities and equipment incidental to the provision of facilities for:

• billiards and snooker
• bowling
• canoeing & kayaking
• go-karting
• horse riding/ pony trekking
• hunting
• motor sports – membership and driving fees
• pitch & putt
• paintball, quasar and other adventure games
• skating

Examples of activities remaining at @ 13.5%-Section 46(1)(c) – Schedule 3, paragraph 21

Services consisting of care of the human body, including:

• Health studio services (e.g. personal fitness training services, massage)
• Aerobics, keep fit classes

Examples of sports related activity @ 21%

• Coaching in swimming, football, tennis, karate etc
• Hire of sporting equipment where the cost is not included in a fee for the provision of a sporting facility

Printed material

Examples of printed material @ 0%. Section 46(1)(b) – Schedule 2, paragraph 9

• Books
• Booklets
• Children's picture and drawing/colouring books
• Atlases

Examples of printed matter reduced from 13.5% to 9% rate-Section 46(1)(ca) – Schedule 3, paragraph 7

• Newspapers
• Magazines
• Periodicals
• Brochures Catalogues
• Comics
• Directories
• Leaflets/flyers
• MapsProgrammes
• Prospectuses (College, University, etc.)
• Sheet Music

Examples of printed material remaining at @ 13.5%-Section 46(1)(c) – Schedule 3, paragraph 18

• Photographic prints and certain photographic services

Examples of printed material @ 21%-Section 46(1)(a)

• Greeting cards
• Diaries and planners
• Business cards
• Books of stationery
• Calendars Exercise books
• Posters
• Postcards
• Photocopied material

Shows, exhibitions, cultural facilities etc.

Examples of shows, exhibitions, cultural facilities etc, reduced from 13.5% to 9% rate-Section 46(1)(ca) – Schedule 3, paragraph 8

Admissions to:

• Art exhibitions and galleries
• Cinemas
• Live theatrical or musical performances where substantial snacks, hot food or alcohol are served in the course of the performance
• Museums – where the museum is not operated by a public body or a cultural body recognised by Revenue
• Fairground amusements/rides (excluding amusement and gaming machines)

Examples of shows, exhibitions, cultural facilities etc @13.5%-Section 46(1)(c)

• None

Examples of exempt shows, exhibitions, cultural facilities etc-Schedule 1

Admissions to:

• Circus
• Live theatrical or musical event where no substantial snacks, hot food or alcohol are served in the course of the performance
• Museums – where the museum is operated by a public body or a cultural body recognised by Revenue
• Bingo

Examples of shows, exhibitions, cultural facilities etc @ 21%-Section 46(1)(a)

• Dances
• Discos/nightclubs and similar clubs

Hotel and holiday accommodation etc.

Examples of supplies reduced from 13.5% to 9% rate-Section 46(1)(ca) – Schedule 3, paragraph 11

• Hotel and guesthouse accommodation
• Meals in hotel/guesthouse (excluding alcohol and soft drinks)
• Short-term letting (< 8 weeks) of house or apartment to tourists or holiday makers
• Short-term letting of mobile home (which is rendered immobile and intended to be retained on site) to tourists or holiday makers
• Letting of a pitch in a caravan park or camping site

Examples of supplies remaining @ 13.5%-Section 46(1)(c) Paragraph 19

• Hire of caravan, camper van, tent or trailer tent – short-term (not exceeding 5 weeks in a 12 month period)
• Hire of pleasure boat – short term (not exceeding 5 weeks in a 12 month period)
• Laundry services provided to hotel guests

Examples of supplies @ 21%-Section 46(1)(a)

• Hire of mobile home, caravan, camper van, tent or trailer tent – long-term
• Hire of pleasure boat – long term
• Telephone charges etc to hotel guests

Food and drink for human consumption

Examples of supplies reduced from 13.5% to 9% rate-Section 46(1)(ca) – Schedule 3, paragraph 3(1) to (3)

• Meals provided in the course of operating hotels, restaurants, cafes, canteens, pubs, catering businesses (including tea, coffee and fruit juice but excluding alcohol, soft drinks and bottled water)
• Hot take-away food and drink (including tea and coffee but excluding alcohol, soft drinks and bottled water)
• Tea/coffee supplied by means of a vending machine
• Food sold by means of a vending machine that would otherwise be zero-rated (e.g. cold sandwich)

Examples of supplies remaining @ 13.5%-Section 46(1)(c)

• Flour or egg-based bakery products (excluding bread, chocolate covered wafers or biscuits, chocolates, sweets or similar confectionery)

Examples of supplies @ zero-rate – Section 46(1)(b) – Schedule 2

• Bread (except where provided as part of a meal)
• Cold take-away food supplied by supermarkets etc.

See VAT Consolidation Act, Schedule 2, Part 2, paragraph 8 for full details including the food and drink table.

Examples of supplies @ 21%-Section 46(1)(a)

• Alcohol, soft drinks, bottled water, even where supplied as part of a meal
• Chocolate covered wafers or biscuits, chocolates, sweets and similar confectionery except where supplied in the course of a meal

Hairdressing etc.

Examples of supplies reduced from 13.5% to 9% rate - Section 46(1)(ca) – Schedule 3, paragraph 13(3)

• Hairdressing services only

Examples of supplies remaining @ 13.5%-Section 46(1)(c)-Schedule 3 paragraph 21(1)

Services consisting of care of the human body, including:

• Beauty treatments
• Hair removal (waxing/laser/etc)
• Spa treatments

Examples of supplies @ 21%-Section 46(1)(a)

• Hair products
• Hair accessories

Appendix 2

Supplies of goods and services remaining at 13.5%

• 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
• concrete
• 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

Source: Revenue Commissioners. www.revenue.ie Copyright Acknowledged