Indirect Taxes and other miscellaneous measures

Indirect Tax 1500X1000
Michael McGivern
Published: 29 Sept 2022 Updated: 29 Sept 2022

VAT

  • The VAT related changes announced in the budget are confined to i) changes in VAT rates on certain activities and ii) an extension of the current reduced rate for electricity and gas.
  • The activities and VAT rate changes are as follows -  
    • Application of a zero VAT rate for newspapers and news periodicals, including digital editions. These are currently subject to the 9% rate of VAT.
    • Application of a zero VAT rate for Automatic External Defibrillators (currently subject to VAT at 23%) and period products (which are currently subject to the 9% rate of VAT).
    • Application of a zero VAT rate for all non-oral Hormone Replacement Therapy. These are currently subject to the 23% rate of VAT.
    • Application of a zero VAT rate for all non-oral Nicotine Replacement Therapy. These are currently subject to the 23% rate of VAT.
    • Flat-rate compensation percentage for Farmers – this is being reduced from 5.5% to 5.0%

All the above VAT rate changes are effective from 1 January 2023

  • Application of the 9% reduced VAT rate for gas and electricity has been extended to 28 February 2023. This was due to end on 31 October 2022.
  • The 9% VAT rate for the tourism and hospitality sectors ends on 28 February 2023 and has not been extended. Application of this reduced rate was originally due to expire at the end of August 2022.  This was extended in May 2022 to an end date of 28 February 2023.

Environmental Measures

  • Continuing the annual increases previously announced, the Carbon Tax Rate will rise by €7.50 per tonne/CO2, increasing from €41 to €48.50 per tonne of CO2. The increased rate will apply to auto-fuels from 12 October 2022 and on all other fuels from 1 May 2023.  This is projected to result in a per litre increase for auto-fuels of approx. 2 cent.  That increase is to be offset by a reduction from 2% to 0% in the in the National Oil Reserves Levy. 

Excise Duties

  • The excise duty on a pack of 20 cigarettes will be increased by 50 cents with a pro-rata increase on other tobacco products.
  • The current excise rate reductions for Marked Gas Oil (5.4 cent/ltr), diesel (16 cent/ltr) and petrol (21 cent/ltr) has been extended to 28 February 2023. These reductions were due to expire on 12 October 2022. 

Defective Concrete Products Levy

  • A new levy to support the Mica Redress Scheme is to be applied to 18 specific concrete products, primarily concrete blocks, pre-cast concrete items, and ready to pour concrete. The levy is at the rate of 10% of the concrete product cost, charged at the point of first supply in the State.  The levy will come into force from 3 April 2023.