VAT rate reduced to 21% until 28th February 2021
The Irish Government announced on 23 July 2020 a reduction in the standard rate of VAT of 23% in the July Jobs Stimulus Package.
Value Added Tax (VAT) is a tax charged in Ireland and countries in the EU on the sale of goods or services. The standard rate of VAT will be reduced from 23% to 21%, effective from 1 September 2020 to 28 February 2021.
“This is something that is being done to boost business, to boost employment, to encourage spending and you may have retailers who take the decision that the difference that two per cent would make could be the difference between them keeping on an employee or not.”, the Tanaiste Leo Varadkar was quoted as saying on RTE’s Today with Sarah McInerney.
The Government plans to inject this year more than €5 billion in cash, along with €2 billion in loan guarantees for businesses, across public investments, worker and welfare supports, funding for business and tax cuts. Representing an estimated 10 per cent of domestic demand it is heralded as the largest cash stimulus package ever for the Irish economy.