Skip links

Ireland budget 2022: hospitality VAT down, carbon tax up

Ireland’s proposed 2022 budget was announced in October 2021. The budget contains a number of VAT measures. Notably, the government will extend Ireland’s reduced 9% VAT rate for the hospitality sector until 31 August 2022. 

Ireland initially introduced the hospitality rate cut to help the sector cope with the “unprecedented challenges” of the Covid-19 pandemic. (For more information about applying the correct VAT rate in Ireland, see these guidelines.)

Call to extend the extension

The industry has welcomed the extension. However, some say government should extend the 9% rate for much longer. Adrian Cummins, CEO of the Restaurants Association of Ireland, says that lockdowns and restrictions have put significant pressure on the industry, which therefore needs ongoing support. 

Green taxes in Ireland 

The carbon tax will increase by €7.50 per ton. The new carbon tax rate will therefore be €41 per ton.

Note also that budget includes a number of other climate measures, including relief for electric vehicles and a fund to help people to improve the energy efficiency of their homes. 

Reduced farmer refunds

The flat rate refund for farmers, which compensates farmers who are not VAT registered for inputs they cannot recover, will be lowered. The rate will decrease from 5.6% to 5.5%.

A simpler way to manage VAT

VAT rates and regulations are constantly changing. Fortunately, there’s an easy way to ensure your business is always 100% VAT compliant. 

Vatglobal’s powerful VAT compliance technology makes managing VAT simple, easy and cost-effective, everywhere you have an obligation.

Get a quote