Dáil Éireann Debate, Tuesday - 21 October 2025
327. Deputy Eoin Ó Broin asked the Minister for Finance if transactions to stay in accommodation (details supplied) are subject to VAT; if so, the obligations on hosts to collect that VAT; and if having planning permission or otherwise impacts any obligation. [57355/25]
View answerI am advised by Revenue that the VAT treatment of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply. VAT is only levied on goods and services provided in the course of an economic activity by a taxable person. Whether a person is carrying out an economic activity or a business depends on the facts and circumstances of a case; it is an objective test. Where a taxable person is carrying out an economic activity or business, they are obliged to register and account for VAT on their supplies if these exceed the relevant registration threshold. Subject to certain rules, a business that is registered for VAT is entitled to a deduction in respect of VAT incurred on its business costs.
In general, the EU Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within categories listed in Annex III of the Directive, in respect of which Member States are permitted to apply a reduced rate, subject to certain conditions. In accordance with the Directive, Ireland applies its reduced rate of 13.5% to the supply of guest and holiday accommodation.
Having regard to these rules, a supplier that solely supplies guest accommodation services and has an annual turnover below the relevant VAT registration threshold of €42,500 is not required to register and account for VAT. Once this VAT registration threshold has been exceeded a supplier would be obliged to register and account for VAT on the supply of those services at the reduced rate of 13.5%.
A taxpayer’s obligations in relation to registering and accounting for VAT is not connected to planning permission.
