Sorca Clarke
Ceist:250. Deputy Sorca Clarke asked the Minister for Finance if he has considered reducing the VAT for beauty services along with hairdressers; and if he will make a statement on the matter. [2254/25]
Amharc ar fhreagraWednesday, 5 February 2025
Ceisteanna (250, 253, 264, 275)
Claire Kerrane
Ceist:253. Deputy Claire Kerrane asked the Minister for Finance if plans to reduce the VAT rate for the hospitality sector will include a service (details supplied); and if he will make a statement on the matter. [2284/25]
Amharc ar fhreagra
Rose Conway-Walsh
Ceist:264. Deputy Rose Conway-Walsh asked the Minister for Finance if the lower VAT rate which media reports have indicated, will be applicable to hairdressers and to the beauty industry; when these changes will come into effect; where further information can be found; and if he will make a statement on the matter. [2698/25]
Amharc ar fhreagra
Paula Butterly
Ceist:275. Deputy Paula Butterly asked the Minister for Finance the plans, if any, in place to reduce the current 13.5% VAT rate to the beauty industry; and if he will make a statement on the matter. [2957/25]
Amharc ar fhreagraFreagraí scríofa
I propose to take Questions Nos. 250, 253, 264 and 275 together.
As the Deputies will be aware, in making any decision in relation to VAT rates or other taxation measures, the Government must balance the costs of the measures in question against their impact and the overall budgetary framework. All decisions in relation to changes to VAT rates, including the full scope of any reduction, will therefore be made in line with this framework.
However, the Deputies should note that the EU VAT Directive, with which Irish VAT Law must comply, contains provisions under Annex III which allows for a reduced rate of VAT on specific goods and services. While hairdressing is included in Annex III to allow for a reduced rate, beauty salons are not listed.
However beauty salons, which provide services consisting of the care of the human body, including beauticians, are subject to the 13.5% rate.
This arises from the fact that many of goods and services to which Ireland applies a reduced rate of VAT, including services related to care of the human body, have their basis under an EU derogation that provides that as Ireland applied a reduced rate to these items on 1 January 1991, we are entitled to continue applying that reduced rate to those items. However, this is conditional on the rate being no less than 12%. These are known as ‘parked’ items, and as the services provided by beauticians are part of these parked items, it is not possible for Ireland to apply the rate of 9% to them.