Ireland: Changes brought about by the 2019 finance bill

As in the previous edition of the VAT newsletter, no significant changes have occurred in VAT compliance/legislation which require comment. However, since the Q3 edition, the Department of Finance has released the 2019 budget statement which has had some effect on various business sectors; details are outlined below:

Changes to the 9% VAT rate

Previously, the 9% VAT rate was a special reduced rate applied to the supply of goods and services by certain business sectors, principally the tourism sector (including the hotel and restaurant sector). The 2019 finance bill confirms that affected goods and services (hotels, restaurants) which were previously subject to VAT at 9% will be subject to VAT at 13.5% with effect from 1 January 2019.

An exception has been made for the provision of sporting facilities and the supply of newspapers and certain other periodicals which will retain the 9% rate.

The finance bill also confirms that the VAT rate on certain electronic publications will reduce from 23% to 9% on 1 January 2019.

Use and enjoyment provisions relating to pre-paid telephone cards

As of 1 January 2019, the finance bill removes the entitlement of telephone card suppliers to reduce the VAT already paid on the supply of telephone cards when they are used by Irish private consumers to access a telecommunications service from outside the EU.