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Better Late than Never: Ireland cuts VAT rate from 23% to 21%

As the saying goes, “Better late than never”. The Irish government has dropped VAT rates and introduced new measures to stimulate the economy in the midst of the COVID-19 pandemic. 

Announced on 23 July 2020, the temporary VAT rate cut came as one of the measures included in the July stimulus package. 

The VAT rate on goods and services will be cut from 23% to 21% from 1 September 2020 to 28 February 2021. The cut is aimed at decreasing the costs of purchases such as food, alcohol, clothes and motor repairs for Irish consumers. reported that Chartered Accountants Ireland has said that the July stimulus is “not a handout; it is an investment in national recovery”.

They welcomed the decrease in VAT from 23% to 21% saying the reduction will aid the retail, service and hospitality sectors in particular (source). 

However, the Irish Tourism & Hospitality industry believes the package is a “cold comfort” to the thousands of hospitality businesses still struggling. 

For more COVID-19 Related vat updates, read:

Covid-19 related VAT easements and provisions (July 1 update)

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