In late July, the Irish Government announced its updated stimulus package for businesses. It included a number of initiatives around employment and wage subsidies, grants, loans and tax cuts. One of the measures announced is a temporary reduction in the standard VAT rate in Ireland. 

What is the change?

  • The standard rate of VAT in Ireland has been reduced from 23% to 21%. This change comes into effect from 1st September 2020 
  • It is a temporary reduction, lasting for a six month period until 28th February 2021 
  • The change will not impact the VAT treatment of supplies that qualify for the reduced rate of VAT, which remains at 13.5%. This includes many activities in the tourism and hospitality sector

Further guidance on the scope of this relief can be found on the government website – please keep checking the Gov.ie website for further updates.

How to apply the VAT reduction

The posts in this series have been drawn from Xero’s Stronger and smarter: a small business handbook. Designed to help small businesses determine which steps to take next, this practical guide uncovers the 10 trends shaping the future – so you can come back stronger and smarter than ever.

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