How Much Is VAT in Ireland? Rates, Calculation & 2026 Changes

If you have ever glanced at an Irish receipt and wondered where the extra chunk came from, you are not alone. Ireland uses a multi-tier VAT system that can feel like a puzzle, but the rules are actually clear once you know where to look.

Current standard VAT rate in Ireland: 23% · Reduced rate (most common): 13.5% · Tourism and catering rate (from July 2026): 9% · Number of VAT rates: 5 (23%, 13.5%, 9%, 4.8%, 0%)

Here are the key VAT facts at a glance.

How much is VAT in Ireland?

Ireland’s standard VAT rate is 23% as of 2025, confirmed by the Avalara (global tax compliance firm). This rate applies to most goods and services — electronics, clothing, household items, and professional services — unless they qualify for a reduced or zero rate. But 23% is not the whole story. Ireland actually operates five different VAT rates: 23%, 13.5%, 9%, 4.8%, and 0%.

What is the standard VAT rate?

• 23% – standard rate for most goods and services (Revenue Commissioners (official tax authority))
• 13.5% – reduced rate for construction, repairs, hotel accommodation, and some services (Avalara (global tax compliance firm))
• 9% – second reduced rate for specific goods and tourism/catering (from July 2026) (Citizens Information (government-backed advice service))
• 4.8% – rate for livestock and some agricultural supplies (Avalara (global tax compliance firm))
• 0% – zero rate for certain food, children’s clothing, books, and exports (Citizens Information (government-backed advice service))

Is VAT always 23%?

No. While 23% is the default, many everyday purchases fall under a lower rate. For example, hotel stays and restaurant meals are charged at 13.5% until mid-2026. Groceries like bread, milk, and fresh fruit are zero-rated. So the effective VAT you pay depends entirely on what you buy.

Is VAT still 14%?

No. The 14% rate was a temporary COVID measure that ended in 2021. The standard rate returned to 23% in September 2021 (Revenue Commissioners (official tax authority)). Some older articles may still reference 14%, but that is outdated.

What is the 13.5% VAT rate?

The 13.5% reduced rate is one of Ireland’s most common VAT rates after the standard 23%. It covers a broad range of services and some goods.

What goods and services are subject to 13.5%?

• Construction and building repairs (Revenue Commissioners (official tax authority))
• Hotel and short-stay accommodation (Spendesk (business finance platform))
• Restaurant and catering services (currently 13.5%, dropping to 9% in July 2026) (Citizens Information (government-backed advice service))
• Certain agricultural and horticultural services (Avalara (global tax compliance firm))
• Repairs and maintenance of goods (Citizens Information (government-backed advice service))

When does the 13.5% rate apply?

It applies when the service is supplied within the state and does not fall under a specific exemption or zero rate. For example, a €100 construction job incurs €13.50 in VAT, bringing the total to €113.50. The rate is also used for some cultural and entertainment activities (Avalara (global tax compliance firm)).

How to calculate VAT on a product or service?

Calculating VAT is straightforward once you know the rate. The same formula works for any percentage.

1. Determine the net price (the price before VAT).
2. Multiply the net price by (1 + VAT rate) to get the gross price (price including VAT). For 23%: net × 1.23. For 13.5%: net × 1.135.
3. To extract the net price from a gross price, divide the gross price by (1 + VAT rate). For 23%: gross ÷ 1.23. For 13.5%: gross ÷ 1.135.
4. Subtract the net price from the gross price to find the VAT amount.

Example: 23% VAT on €100

Net price: €100. VAT amount: €100 × 0.23 = €23. Gross total: €123 (Calculator.net VAT calculator). The formula: €100 × (1 + 0.23) = €123.

Example: 13.5% VAT on €100

Net price: €100. VAT amount: €100 × 0.135 = €13.50. Gross total: €113.50 (Calculator.net VAT calculator).

Removing VAT: example

If you see a price of €123 (gross) and want the net: €123 ÷ 1.23 = €100. The VAT portion is €23. This is useful for businesses reclaiming input VAT.

Why is the Irish VAT so high?

Ireland’s standard VAT rate of 23% is above the European Union average. But why?

How does Irish VAT compare to other EU countries?

• Hungary: 27% (highest in the EU) (VATAi Blog (VAT consultancy))
• Ireland: 23%
• Germany: 19% (PwC Tax Summaries (global tax advisory))
• United Kingdom: 20% (UK Government)
• Luxembourg: 17% (lowest standard rate in EU)

What is the reason for high VAT?

Ireland relies heavily on VAT as a revenue source because corporation tax from multinationals is volatile. In 2023, VAT accounted for roughly 7% of GDP (Revenue Commissioners (official statistics)). The government uses these funds to finance public services like healthcare, education, and infrastructure. The trade-off is a higher tax on consumption, which disproportionately affects lower-income households that spend a larger share of their income on goods and services.

Who pays 40% tax in Ireland?

This is a common confusion. Many people searching “40% tax” actually mean VAT, but 40% is not a VAT rate in Ireland.

Does 40% tax refer to VAT or income tax?

40% is the higher rate of income tax, not VAT. Ireland’s income tax system has two rates: 20% (standard) on income up to €42,000 for a single person, and 40% on anything above that (Citizens Information (official guide)). VAT rates top out at 23%.

What income levels are taxed at 40%?

• Single person: income over €42,000 is taxed at 40% (Revenue Commissioners (income tax bands))
• Married couple (one earner): threshold is €52,000 before 40% applies
• Married couple (two earners): each has their own band

The confusion likely arises because both VAT and income tax appear on payslips and receipts, but they are separate systems entirely. If you see “40%” on a payslip, that is income tax and USC, not VAT.

Specification table: Ireland’s VAT rates in detail

Five distinct rates, one pattern: each applies to a defined set of goods and services, with a few exceptions at the boundaries.

The pattern shows that most everyday consumer goods fall under the standard rate, while housing and tourism benefit from reduced rates.

Timeline of recent and upcoming VAT changes

• January 2021: Standard rate reduced to 21% as temporary COVID measure (Revenue Commissioners (official tax authority))
• September 2021: Rate increased back to 23% (Avalara (global tax compliance firm))
• January 2022: Rate remained 23% (consolidated) (Citizens Information (government-backed advice service))
• January 2023: Rate still 23% (Citizens Information (government-backed advice service))
• 1 January 2025: Heat pump installation VAT reduced from 23% to 9% (Intax.ie (Irish tax advisory))
• 1 July 2026: Food and catering service rate drops from 13.5% to 9% (Intax.ie (Irish tax advisory))

What’s confirmed – and what’s still unclear

What tax experts say

“The Revenue Commissioners provide a comprehensive list of current VAT rates, which is the definitive source for businesses and individuals alike.”

— Revenue Ireland (official guidance)

“Understanding the different VAT rates and what applies to which goods is essential for anyone running a business or managing personal finances in Ireland.”

— Citizens Information (independent public service guide)

The takeaway: Both official sources agree — check Revenue.ie first, and use Citizens Information for plain-language explanations.

Summary: What this means for you

Whether you are paying VAT on a latte or invoicing for a construction job, the Irish system is layered but logical. The standard 23% rate covers most purchases, but reduced rates save you money on housing, food, and tourism – and a major cut is coming for caterers in 2026. For Irish consumers and business owners, the choice is clear: know your rate, calculate correctly, and plan for the July 2026 shift, or risk paying – or charging – too much.

For a detailed breakdown of how Ireland’s VAT compares to its nearest neighbour, see the article on 2025 rates and UK comparison.

Frequently asked questions