To help businesses mainly in the hospitality, holiday accommodation, and attractions sectors, the Irish Government reduced the rate of VAT from the reduced rate of 13.5% to the second reduced rate of 9% on a temporary basis. This will revert back to the 13.5% reduced rate from 1 September 2023. This change applies to:
- The supply of restaurant and catering services, guest and holiday accommodation
- Various entertainment services such as admission to cinemas, theatres, museums, fairgrounds, and amusement parks
- Hairdressing and certain printed matter such as brochures, maps, and programmes
Details of the reduction can be found on the Budget 2023 website.
What the 13.5% VAT rate applies to
The reduced VAT rate of 13.5% applies to the supply of:
- restaurant and catering services
- guest and holiday accommodation
- various entertainment services such as admission to cinemas, theatres, museums, fairgrounds and amusement parks
If you are still unsure whether your transactions should be at the reduced rate, check with your accountant or the Revenue.
Which VAT rate to use
In Sage Accounting use the Second Reduced Rate 13.5%.
Make sure the reduced VAT is applied correctly
Set the default VAT on ledger accounts
Consider setting the Reduced Rate 13.5% VAT rate by default on ledger accounts you use for hospitality and tourism.
You may want to create new Ledger accounts specifically for tourism and hospitality transactions.
Product and services
Consider setting the reduced VAT rate as the default on any products and services you use for hospitality and tourism.
This will make sure that the correct VAT rate is used when entering transactions.
Bank feeds and imported bank transactions
Make sure you select the Reduced Rate 13.5% when processing transactions from a bank feed or imported bank statement.
Copy invoices, quotes, estimates and credit notes
If you copy existing transactions that relate to tourism and hospitality, make sure that they are still using the Reduced Rate 13.5%.
VAT rates are copied at the rate applied to the original transaction.
Future dated transactions
Make sure any transactions created with a date in the future are using the Reduced Rate 13.5%.