Ireland extends 9% VAT subsidy on tourism and newspapers

Wed 16th Oct 2013

Yesterday’s Irish budget confirmed that the temporary reduction in Irish tourism and newspaper VAT from 13.5% to 9% will continue.

Doubts about cost of Irish tourism VAT subsidy

The reduction of the Irish tourism VAT to 9% was implemented in 2012 as a short term attempt to help the key industry recover from the Irish economic slump.  It was due to be reversed at the end of 2013, and there had been doubts the Irish tourism VAT subsidy could still be afforded.  Industry campaigners had claimed that it had created over 9,000 jobs since its introduction, although such a claim was difficult to prove as the whole economy has been recovering at the same time.  Newspapers will also enjoy the extension, and they will not go to the higher, standard rate as planned.

Other EU states reduce hotel and restaurant VAT

Several other EU member states have been looking to boost their tourism sectors.  Greece cut restaurant VAT to 13% from 23% this summer.  Portugal wants to lower restaurant VAT too, but requires approval from the government and bail-out troika of the IMF, ECB and EC.

Most EU VAT rates allow for a discounted tourism and going out VAT reduction.