9% VAT Rate to be retained until the end of 2013

The government yesterday announced its intention to maintain the 9% rate of VAT for the tourism, leisure and hospitality sector throughout 2013. Minister for Tourism, Leo Varadkar, said "Following recent discussions with the Minister for Finance, I have obtained an assurance that the lower rate of VAT will be maintained during 2013 so that businesses, tour operators and customers alike can plan for the 2013 season knowing that the 9pc rate will apply".

The announcement has been widely welcomed by the sector and is good news for both businesses and their consumers. Michael Vaughan, President of the Irish Hotels Federation said "The nine percent VAT rate gives tourism enterprises a key competitive advantage when marketing Ireland as a tourism destination, particularly in the run up to the Gathering in 2013 which is to be Ireland’s biggest ever tourism initiative".

The 9% rate of VAT came into effect on 1 July 2011 and applies to many goods and services in the tourism and hospitality sector including restaurant and catering services; hotel and holiday accommodation; admissions to cinemas, theatres, certain musical performances, museums and art gallery exhibitions; fairgrounds or amusement park services and the use of sporting facilities. Other goods and services also included in this lower rate are hairdressing services and printed matter such as brochures, maps, programmes, leaflets, catalogues and newspapers.

Revenue's website states that goods and services currently chargeable at the 9% VAT rate will revert to a 13.5% VAT rate on 1st January 2014.