Dáil Éireann Debate, Tuesday - 29 September 2026
323. Deputy James O'Connor asked the Tánaiste and Minister for Finance if he his Department consider a reduction in the VAT rate for the beauty industry in the upcoming budget (details supplied); and if he will make a statement on the matter. [68564/26]
View answerAs the Deputy will be aware, it is long established practice for the Minister of Finance not to comment on matters that may be subject to Budget decisions.
However I can say that 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.
