Relief for Irish hotels as lower VAT rate and energy supports to continue

By Fiona Frawley

February 21, 2023 at 4:34pm

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Hoteliers have welcomed the news that the 9% Tourism VAT Rate for Irish hotels is to be extended.

The lower rate had initially been scheduled to run til the end of this month, and then return to 13.5%.

The reduced rate currently applies to: hotel guest and holiday accommodation; restaurant and catering services; entertainment such as cinemas, theatres and museums as well as hairdressing and printing of brochures, maps and programmes.

Government has also decided to reform the energy support scheme for businesses.

President of the Irish Hotels Federation (IHF) Denyse Campbell has said that the newly announced measures will provide greater certainty to those in the tourism sector as the cost-of-living crisis continues to significantly impact businesses.

“Today’s announcement is a clear recognition by the Government of the challenges facing tourism and hospitality, Ireland’s largest indigenous employer which currently supports over 250,000 livelihoods. It will go a long way in helping to sustain the recovery of our industry at a time when businesses and consumers are facing significant economic and financial headwinds,” she said.

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“A vibrant tourism industry is one of the most effective ways to spread employment opportunities and prosperity throughout the entire country. That is why the decision to extend the 9% VAT rate is so critical for communities and regions that rely on tourism as a major employer and driver of economic activity.”

Ms Campbell also noted that most European countries implement a reduced rate VAT rate for tourist accommodation, continuing "it is clear that the 9% rate is the right rate for Ireland. The current VAT rate is in line with our European neighbours".

Government had previously discussed a continued reduced VAT rate for restaurants, but not for hotels.

Header image via Instagram/parkkenmare

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