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Ireland €640m tourism VAT subsidy challenge

  • 8 June 2016 | Richard Asquith

Ireland €640m tourism VAT subsidy challenge

Irish government officials have challenged the continuing discount on the country’s tourism VAT rate. Currently hotels, restaurants, cafes and related industries only levy the reduced VAT rate of 9% compared to the other reduced VAT rate of 13.5% which was applied to tourism prior to 2011.

The discount is worth €640m per annum to the sector, and was introduced in 2011 at the height of the European financial and currency crisis.

However, tourism numbers have now more than recovered, and government officials have declared that the effective subsidy can be withdrawn as its ‘job is done’. They confirmed that the VAT rate returning from 9% to the other VAT reduced rate of 13.5% would raise €640 million per annum.

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VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.