Dáil Éireann Debate, Wednesday - 6 May 2026
213. Deputy Robert O'Donoghue asked the Tánaiste and Minister for Finance the rationale for limiting the forthcoming 9% VAT rate reduction, due to take effect in July 2026, to hairdressers and barbers, excluding the wider beauty sector; whether any consideration was given to extending the 9% VAT rate to beauty service providers; if so, the outcome of that consideration; and if he will make a statement on the matter. [32017/26]
View answer214. Deputy Robert O'Donoghue asked the Tánaiste and Minister for Finance the basis on which distinctions were made between hairdressing/barbering services and other personal care services within the beauty sector for the purposes of VAT policy; if he is aware of the financial pressures currently facing businesses in the beauty sector; whether these were taken into account in the decision to exclude them from the reduced VAT rate; and if he will make a statement on the matter. [32018/26]
View answer215. Deputy Robert O'Donoghue asked the Tánaiste and Minister for Finance if any engagement has taken place with representative bodies from the beauty industry regarding VAT rates; if so, the nature of such consultations; and if he will make a statement on the matter. [32019/26]
View answer239. Deputy Keira Keogh asked the Tánaiste and Minister for Finance to consider extending the VAT reduction that is applied to the hospitality sector to include the beauty industry, given that beauty salons were classified under hospitality during the Covid-19 closures, and also taking into account that the 9% VAT rate applied to hairdressers will not be applicable to beauty salons who do not offer this service; and if he will make a statement on the matter. [33029/26]
View answerI propose to take Questions Nos. 213, 214, 215 and 239 together.
The VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they are exempt from VAT or fall within the categories of goods and services listed in Annex III of the EU VAT Directive, to which Member States are permitted to apply lower VAT rates subject to certain rules.
Beauticians are not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT, and therefore they would fall to be taxed by Member States at their standard rate of VAT – which in Ireland is currently 23%. However, the Directive allows that a Member State may retain certain long-standing VAT arrangements that they had in place, subject to strict conditions including that the terms of the historic arrangement cannot be extended.
On this basis, Ireland is permitted to retain its long-standing application of its reduced VAT rate – which is currently 13.5% – to services related to the care of the human body, which includes beautician services. In accordance with the Directive this arrangement is treated as a ‘parked’ rate, which means that it cannot be reduced below 12%. If Ireland were to cease the application of the parked rate to these supplies, then under the terms of the Directive these services would have to be subject to the standard rate of VAT.
As hairdressing services are specifically included in Annex III and are not a ‘parked’ item, it is possible to apply the 9% rate to them. Therefore, in accordance with Finance Act 2025 the 9% rate will apply to hairdressing services from 1 July 2026. This measure includes hairdressing services provided by beauticians but does not extend to other beauty services.
As the position is as outlined and there is no possibility of extending the reduced rate of VAT as requested.
