Irish Finance Bill 2013 includes VAT measures

The Irish Finance (Number 2) Bill 2013 was published last week.  It included a number of VAT rate changes.

1. The new Bill restricts the offset of VAT incurred for services on the sale or transfer of a going concern business.  In future, VAT will only be allowable in so far as it relates to taxable/VAT registered businesses.
2. A range of goods will be moved from 4.8% reduced VAT rate to 9% Irish VAT rate.  This will reduce the number of Irish reduced VAT rates to two, in accordance with EU rules.  These include:

• Supply of race horses
• Supply of race greyhounds
• The hire of either race greyhounds or horses.

The standard Irish VAT rate is 23%.  Ireland raised its VAT rate from 21% in 2012.

There are currently three reduced VAT rates in Ireland

• 13.5% Irish VAT on agriculture, property services, labour-intensive services
• 9% Irish VAT on tourism services, newspapers and other services
• 4.8% on livestock, which is to be scrapped as above.

The EU VAT Directive only permits two reduced VAT rates, in addition to the standard VAT rate and nil-VAT rate (financial services, some foodstuffs, public transport etc)