Ireland retains 9% VAT rate on hotels
Today’s Irish budget confirmed that the provision of hotel accommodation will continue to enjoy its reduced Irish VAT rate of 9%. The standard Irish VAT rate is 23%. Most EU countries offer a reduced VAT rate on hotels and many tourist-related services to help boost their tourism industries.
Ireland reduced its hotel VAT rate from 13% to 9% in 2011 at the height of the financial crises to help subsidies its key tourism sector. A study estimated that this move created 33,000 jobs.
Last month, the OECD called for Ireland to raise hotel VAT on the basis that as tourism numbers had now risen to pre-crisis levels, the subsidy should be withdrawn.
Greece has recently been forced to raise its hotel and restaurant VAT rates by its creditors as part of the latest bail out. The UK is the only major EU country which levies its full, standard VAT rate on tourism services.
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