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Irish reduced tourism VAT rate a success

  • Feb 26, 2015 | Richard Asquith

Irish reduced tourism VAT rate a success

New analysis of the performance of Irish hotels appears to support the case for Ireland’s reduced 9% VAT rate on tourism services.

The National University of Ireland has claimed that the lower VAT rate has created 30,000 jobs since its introduction in 2011.  This represents one quarter of all new jobs created in Ireland since the VAT cut.

The rate had been 13.5%, and the cut was funded by a rise in the pension levy tax.  The cost of the reduction has been estimated at €107m per annum, which would have comfortably surpassed by the corporation and employment taxes generated along with the extra jobs.

In a further indication of the health of the sector it was revealed that whilst 145 hotel went into insolvency in 2014, 120 were already resold or about to be resold.

The cut in tourism Irish VAT is designed as a temporary measure to help an industry that employs over 200,000 people in the country.

Many countries across the EU have pushed through VAT cuts to tourism, including Germany and Greece.  The UK is one of the few countries without a VAT concession to its visitor services sector.

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 can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.