VAT Rate changes
Irish unions want tourism VAT subsidy end
In 2011, Ireland reduced the VAT rate on hotels to 9% from 13.5% in a bid to support the tourism sector. Visitor numbers have rallied since then with many hoteliers reporting strong profits. The Irish trade unions’ association is lobbying for an end to the 9% reduced VAT rate in the 2017 Irish budget due this month. This is supported by a recommendation from the OECD (Organisation for Economic Cooperation and Development)
Elsewhere, the OECD report that countries have stopped raising standard VAT rates, and instead are shifting their focus to phasing out the use of reduced VAT rates. However, in contradiction to this we have seen a number of VAT changes:
- Czech Republic will use the reduced VAT of 15% instead of 21% for restaurants effective from December 16.
- Hungary is planning to reduce rates for restaurants (excluding alcohol) from 27% to 18% effective January 2017 and follow this with a further reduction to 5% from January 2018.
- Since July 2016 Portugal has granted a subsidy to its catering industry reducing rates from 23% to 13%.