Dáil Éireann Debate, Tuesday - 28 April 2026
484. Deputy Michael Collins asked the Minister for Enterprise, Tourism and Employment whether his Department has engaged, or intends to engage, with representatives of the beauty sector regarding the exclusion of beauty services from the forthcoming VAT reduction; whether he will support discussions with the Minister for Finance to seek a more equitable policy approach; and if he will make a statement on the matter. [29708/26]
View answerAs the Deputy will be aware, ultimately, changes to the tax system are a matter for the Minister for Finance as part of the Budget. Any changes to tax policy are considered in light of the costs of these measures against their impact and are considered within the overall budgetary framework and available fiscal parameters.
My officials and I regularly engage with enterprise stakeholders on matters related to tax policy and these considerations inform our engagement with the Minister for Finance and his officials.
My Department has previously received communication from a range of stakeholders regarding the extension of the 9% rate to the beauty industry and this has often been framed in tandem with the Hospitality VAT rate.
Budget 2026 saw a reduction in the VAT rate applied to Food and Catering services and hairdressing services from 13.5% to 9%. This measure will come into effect from 1 July 2026.
Any changes to VAT must be made within the provisions of the EU VAT Directive. Annex III of the VAT Directive sets out the goods and services that a reduced rate of VAT can be applied to. Beauty salons are not included in this list and are therefore among the services which would be ordinarily subject to the standard rate of VAT, which in Ireland is 23%.
In Ireland beauty salons are subject to the 13.5% reduced rate of VAT. The application of this reduced rate in Ireland is due to the use of a historical derogation. A condition of this historical derogation is that the rate may be no lower than 12% and the rate is “parked” at Ireland’s 13.5% rate.
I am conscious that stakeholders operating in this sector have been faced with similar cost pressures to those operating in parts of the hospitality sector which will benefit from the reduced rate to be introduced in July. However, for the reasons stated, it is my understanding that it is not possible to reduce the rate of VAT on beauty salons further from the 13.5% rate that currently applies.
