Ireland told by OECD to raise tourism VAT

Wed 16th Sep 2015

The Organisation for Economic Co-operation & Development (OECD) has recommended to Ireland that it increases its reduced tourism VAT rate from 9% to the standard rate of 23%.

Ireland cuts tourism VAT rate to 9% in July 2011 to boost its struggling hotels and tourism sector. It has since been claimed that the Irish VAT tourism subsidy has created over 30,000 jobs in the sector. Although, given that tourist trips across the whole of Europe have grown back to their pre financial crisis levels too, the Irish growth would have happened anyway.

The OECD suggests that the Irish discount creates distortions in the marketplace, and compliance complexities as companies and the Irish Revenue debate which can be classified as tourism. It’s conclusions were presented in its Ireland country report, updated on 15 September 2015. It points out that the country is now enjoying high growth, and so the emergency measure should be withdrawn.

EU VAT rates on tourism and hotels

Most countries in the European promote their tourism industries through lower EU VAT rates on hotel or hostel accommodation and restaurant meals.

Country

Hotels

Restaurants

Theatres, Cinema  

Standard VAT Rate

Ireland

9%

9%

9%

23%

UK

20%

20%

20%

20%

France

10%

10%

10%

19.6%

Germany

7%

19%

7%

19%

Italy

10%

10%

10%

22%

The UK is one of the very few countries that offers no concession.

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