Why does Ireland have three different VAT rates (23%, 13.5% and 9%)?

Ireland uses tiered rates to match the tax to the nature of the goods or service. The 23% standard rate applies to most goods and services. The 13.5% reduced rate covers construction, fuel and many everyday services. A 9% second reduced rate has historically applied to parts of tourism and hospitality. On top of these, a 0% zero rate applies to essentials like most food, children's clothing and oral medicines, which keeps basic living costs untaxed.

What is Ireland's 9% VAT rate, and does it still apply to hospitality?

The 9% rate is Ireland's second reduced rate, historically tied to tourism and hospitality — restaurants, hotels and similar services. It was introduced to support the sector, then withdrawn and reinstated at various points, notably as a temporary relief measure. Because its scope has shifted over the years, whether a given hospitality service is taxed at 9%, 13.5% or another rate depends on the period. Always check Revenue's current guidance for the rate in force at the time of supply.

VAT in Ireland

The standard VAT rate in Ireland is 23%. Reduced rates of 13.5%, 9%, 4.8%, 0% apply to certain goods and services such as food, books and medicine. To add VAT, multiply the net price by 1.23 — on a €100 item that adds €23, for €123 total.

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In Ireland, VAT (in Irish, CBL — Cáin Bhreisluacha) is collected and administered by the Revenue Commissioners. At 23%, Ireland's standard rate sits among the highest in the EU, yet the system is unusually generous at the bottom: most food, children's clothing and oral medicines are zero-rated, so shoppers pay no VAT on them. Alongside the standard rate, Ireland applies a 13.5% reduced rate to items like construction and fuel, and a 9% rate that has, at times, covered tourism and hospitality.

Reduced rates

13.5%, 9%, 4.8%, 0%

The 4.8% livestock rate is specific to Ireland and covers live cattle, sheep, horses and greyhounds. Many foods, books and children's clothes are zero-rated.

One of the widest zero-rate lists in the Union

Ireland zero-rates a broader range of everyday goods than almost any other member state: most food and drink, oral medicines, children's clothing and footwear, and books. Like the UK's, these are held under a pre-1991 derogation rather than granted by the current directive, which is why a newer member state cannot copy them however similar its policy goals.

Zero-rated is not exempt, and the distinction carries the same consequence here as across the Irish Sea: a zero-rated supply is taxable, so the seller keeps the right to reclaim VAT on inputs. Exempt supplies — financial services, insurance, most education and medical care — do not, and a business straddling both must apportion.

Two registration thresholds, and the second one surprises people

Ireland sets a higher threshold for supplying goods than for supplying services. A consultancy therefore registers at a much lower turnover than a shop selling the same value of stock, and a business doing both is tested against the rules for each. The mixed case is the common one and the one most often got wrong.

Registration can also be voluntary below the threshold, and for a business selling mainly to other VAT-registered businesses it often pays: the customer does not care about the VAT it can reclaim, while the seller starts recovering its own. Selling to consumers reverses the calculation entirely — there, the threshold is protection rather than paperwork.

FAQ

Why does Ireland have three different VAT rates (23%, 13.5% and 9%)?: Ireland uses tiered rates to match the tax to the nature of the goods or service. The 23% standard rate applies to most goods and services. The 13.5% reduced rate covers construction, fuel and many everyday services. A 9% second reduced rate has historically applied to parts of tourism and hospitality. On top of these, a 0% zero rate applies to essentials like most food, children's clothing and oral medicines, which keeps basic living costs untaxed.
What is Ireland's 9% VAT rate, and does it still apply to hospitality?: The 9% rate is Ireland's second reduced rate, historically tied to tourism and hospitality — restaurants, hotels and similar services. It was introduced to support the sector, then withdrawn and reinstated at various points, notably as a temporary relief measure. Because its scope has shifted over the years, whether a given hospitality service is taxed at 9%, 13.5% or another rate depends on the period. Always check Revenue's current guidance for the rate in force at the time of supply.

Please note

VAT rates change, often yearly. This figure for Ireland is a general reference as of 2026 — confirm the current rate with the official source before relying on it.

Source

Irish Revenue