Ireland – Lowered Standard VAT Rate to 21%

Ireland announced a temporary standard VAT rate drop from 23% to 21%. The lower rate will be effective on September 1, 2020 until February 28, 2021 as part of a €5.2bn economic package. It appears the decision was made in just a few hours before the Cabinet meeting in Dublin Castle. The 2% VAT reduction will benefit consumers – standard rate applies to 50% of activity in Ireland including household goods motor vehicles, non-basic foods stuffs, clothing, alcohol, electrical goods, many e-services, professional services and telecommunications. However, goods that qualify for a 13.5% reduced VAT rate will not be affected. In other words VAT on tourism and hospitality sector, including restaurant meals, hotel accommodation, housing, general repairs etc. remain the same.

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