Temporary reduced VAT rate for hospitality and tourism in the Republic of Ireland

Summary

From 1 September 2023, the reduced rate for hospitality in ROI will revert back to the usual rate.

Description

What changed?

To help businesses mainly in the hospitality, holiday accommodation, and attractions sectors, the Irish Government reduced the rate of VAT from the reduced rate of 13.5% to the second reduced rate of 9% on a temporary basis. This will revert back to the 13.5% reduced rate from 1 September 2023. This change applies to:

The supply of restaurant and catering services, guest and holiday accommodation.
Various entertainment services such as admission to cinemas, theatres, museums, fairgrounds, and amusement parks.
Hairdressing and certain printed matter such as brochures, maps, and programmes.

Details of the reduction can be found on the Budget 2023 website.

Resolution

The reduced rate of 9% VAT is ending on 1st September 2023. After this date, you should revert to using the usual tax codes at 13.5%.

If you need to record transactions that took place under the temporary 9% reduced rate, you can select the header below to view the process for recording these transactions.

How to account for transactions under the reduced 9% VAT rate

You can create a new tax code to represent the temporary 9% VAT rate, which make's it easier to identify transactions you're entering during the temporary reduced VAT rate period for reconciliation and analysis purposes.

Create new tax codes

You can create new tax codes for transactions that qualify for the reduced 9% VAT rate as follows:

Create two new tax codes to represent the existing tax codes T3 and T13.
If you deal with EU reverse charge, or reduced rate purchases from the EC you should also create further tax codes to represent T20, T25 and T26 which are linked to T3 and T13.

We recommend using T44, T45 and if required, T46, T47 and T48. If these are already in use, use the next available codes.

On the menu bar, click Settings, click Configuration then click Tax codes.
Select the tax code T44 or the next available code, and click Edit.

Complete the edit tax code window as follows:

Rate	Enter the required percentage as 9.00
Include in VAT Return	To ensure the transactions are picked up by the VAT Return, select this check box
Reverse Charge	From the drop-down list, choose No
Resale	Select this check box
Outside EC	Leave this check box unticked
Enable EC Code	Leave this check box unticked
Rate	From the drop-down list, choose Reduced
Description	Enter this description: Temp reduced rate sales and purchases of goods for resale

Click OK.
Select tax code T45, or the next available code, and click Edit.

Complete the Edit tax code window as follows:

Rate	Enter the required percentage as 9.00
Include in VAT Return	To ensure the transactions are picked up by the VAT Return, select this check box
Reverse Charge	From the drop-down list, choose No
Resale	Leave this check box unticked
Outside EC	Leave this check box unticked
Enable EC Code	Leave this check box unticked
Rate	From the drop-down list, choose Reduced
Description	Enter this description : Temp reduced rated purchases of goods for non-resale

Click OK.
Select tax code T46 or the next available code and click Edit.

Complete the edit tax code window as follows:

Rate	Leave the percentage rate as 0.00
Include in VAT Return	To ensure the transactions are picked up by the VAT Return, select this check box
Reverse Charge	From the drop-down list, choose EU reverse charge
Resale	Leave this check box unticked
Outside EC	Leave this check box unticked
Enable EC Code	Select this check box and then select the following options: EC Purchases, Services
Link to	Choose T44 or any alternative code you have used
Rate	From the drop-down list, choose Reduced
Description	Enter this description : Temp reduced rate EU reverse charge

Click OK.
Select tax code T47 or the next available code and click Edit.

Complete the edit tax code window as follows:

Rate	Leave the percentage rate as 0.00
Include in VAT Return	To ensure the transactions are picked up by the VAT Return, select this check box
Reverse Charge	From the drop-down list, choose No
Resale	Select this check box
Outside EC	Leave this check box unticked
Enable EC Code	Select this check box and then select the following options: EC Purchases, Goods
Link to	Choose T44 or any alternative code you have used
Rate	From the drop-down list, choose Reduced
Description	Enter this description : Temp reduced rate purchases from EC suppliers

Click OK.
Select tax code T48 or the next available code and click Edit.

Complete the edit tax code window as follows:

Rate	Leave the percentage rate as 0.00
Include in VAT Return	To ensure the transactions are picked up by the VAT Return, select this check box
Reverse Charge	From the drop-down list, choose No
Resale	Leave this check box unticked
Outside EC	Leave this check box unticked
Enable EC Code	Select this check box and then select the following options: EC Purchases, Goods
Link to	Choose T45 or any alternative code you have used
Rate	From the drop-down list, choose Reduced
Description	Enter this description : Temp reduced rate purchases from EC suppliers

Click OK, then click Apply.
Click Close, then, if prompted, to save the changes, click No.

This article offers general guidance only. While accurate at the time of publication, it may not suit your specific needs. We make no express or implied warranties. For tailored advice, consult a professional. For VAT, customs, or duties queries, contact Revenue. We accept no liability for any loss from using this content. VAT or tax codes shown reflect default software settings and may differ in your setup.

Solution Properties

Solution ID: 201016110337917
Last Modified Date: Tue Aug 22 13:12:25 UTC 2023
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