The Minister announced a one-year extension to the reduced VAT rates for gas and electricity, increases in the VAT registration thresholds for both goods and services, and the zero-rating of audiobooks, ebooks, and solar panels for schools. For the hospitality sector, the 13.5 percent VAT rate, which recommenced from 1 September 2023, remains unchanged. The Revenue Commissioners will shortly launch a public consultation examining how digital advances can be used to modernise Ireland’s VAT invoicing and reporting system.
Gas and electricity
The 9 percent VAT rate for gas and electricity (normally 13.5 percent), which was originally due to end on 31 October 2023, is being extended for an additional 12 months until 31 October 2024. The 9 percent reduced rate first took effect from 1 May 2022. The extension is expected to cost €315 million in 2024.
VAT registration thresholds
From 1 January 2024, the current VAT registration thresholds are being increased from €37,500 to €40,000 for services, and from €75,000 to €80,000 for goods. According to the Minister’s speech, although the increases are modest, they are targeted at small businesses whose turnover is close to the current thresholds. The increases aim to bring the thresholds broadly in line with forthcoming EU VAT registration thresholds.
Audiobooks, ebooks, and solar panels for schools
From 1 January 2024, the VAT rate for audiobooks and ebooks will be reduced from 9 percent to zero percent (to bring the rate in line with paper books), at a full year cost of €3 million, according to the Budget 2024 publications. From the same date, the VAT rate for the supply and installation of solar panels installed in schools will also be reduced to zero percent.
Charities VAT compensation scheme
From 1 January 2024, the total annual capped fund for the Charities VAT compensation scheme is being increased from €5 million to €10 million. The scheme aims to reduce the VAT burden on charities and partially compensate for VAT paid by the charity and applies to VAT paid on expenditure from 1 January 2018.
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