Dáil Éireann Debate, Thursday - 24 September 2026
283. Deputy Ken O'Flynn asked the Tánaiste and Minister for Finance the rate of VAT currently applying to home heating oil (kerosene); the estimated full year cost of reducing that rate from 13.5 per cent to 9 per cent, in line with the temporary rate applied to domestic gas and electricity; whether any such reduction is under consideration; and if he will make a statement on the matter. [67952/26]
View answer289. Deputy Ged Nash asked the Tánaiste and Minister for Finance the projected cost of reducing the VAT rate on home heating oil to 9%, from the current 13.5% rate for 2027; and the additional projected cost of introducing it from 6 October 2026. [67877/26]
View answerI propose to take Questions Nos. 283 and 289 together.
The VAT rating of goods and services is subject to EU VAT law, 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.
Home heating oil is not included in the categories of goods and services on which the EU Directive allows a lower rate of VAT. 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 the supply of hydrocarbon oil of a kind used for domestic or industrial heating fuel.
It is not possible to apply a 9% VAT rate to home heating oil under the VAT Directive.
