Ireland has five VAT rates, and in 2026 one of the biggest groups of small businesses moved between them. Since 1 July 2026, restaurant and catering services, hot take-away food and hairdressing have been charged at the second reduced rate instead of the reduced rate.
This guide sets out what each rate covers, what the July change means for prices and margins, and how to add VAT to a price or take it out. For quick sums, use the VAT calculator for Ireland.
Ireland’s VAT rates at a glance
These are Revenue’s current VAT rates for 2026:Revenue
| Rate | Name | Typical supplies |
|---|---|---|
| 23% | Standard rate | Most goods and services, including professional and consultancy services, furniture, motor vehicles, batteries and tyres |
| 13.5% | Reduced rate | Certain building services, repair, cleaning and maintenance, certain fuels, hotel lettings, admission to cinemas, theatres and museums, short-term hire and tour guides |
| 9% | Second reduced rate | Restaurant and catering services, hot take-away food and hairdressing (from 1 July 2026), electricity and gas, newspapers and periodicals, sports facilities, new qualifying apartments |
| 4.8% | Livestock rate | Livestock, and horses intended for food or agricultural production |
| 0% | Zero rate | Exports, intra-EU supplies to VAT-registered businesses, certain food and drink, certain books and newspapers, certain oral medicine, children’s clothing and footwear |
If something is not listed at a lower rate, it is charged at the standard rate. Revenue’s rate pages give fuller lists of what falls under each rate, and are the place to check anything you are unsure of.Revenue
What moved to the second reduced rate on 1 July 2026
Budget 2026 moved three groups of supplies from the reduced rate of 13.5% to the second reduced rate of 9%, from 1 July 2026:Revenue
- restaurant and catering services;
- hot take-away food;
- hairdressing.
These had been at the reduced rate since 1 September 2023.gov.ie
What the change means depends on what you did with your prices. Take a café bill of €45, VAT included:
| At 13.5% (to 30 June) | At 9% (from 1 July) | |
|---|---|---|
| VAT in the bill | €5.35 | €3.72 |
| What the business keeps | €39.65 | €41.28 |
If you kept your menu prices the same, you now keep more of each sale. If you cut prices to pass the saving on, the customer pays less and your net takings stay about where they were. Over a year the difference adds up: on €50,000 of VAT-inclusive sales, the VAT due falls from €5,947.14 to €4,128.44.
Not everything a café or restaurant sells moved. Some food and drink is zero-rated, and other items keep their own rate, so check each line on your till against Revenue’s VAT rates pages.
What else is at the second reduced rate
The second reduced rate of 9% also covers:Revenue
- electricity and gas for heating and lighting, extended by Budget 2026 to 31 December 2030;
- newspapers and periodicals, and sports facilities;
- new qualifying apartments, from 26 November 2025 to 31 December 2030.
The rest of the reduced rate of 13.5% is unchanged. It still covers building services, repairs and maintenance, hotel lettings and admissions to cinemas, theatres and museums.Revenue So a hotel’s room charges and its restaurant bills are now at different rates.
Two examples with mixed rates
Many small businesses now charge more than one rate on the same bill. Here are two common cases, using VAT-inclusive prices.
A hair salon. A customer pays €60 for a cut and colour and €20 for a bottle of shampoo. The hairdressing is at the second reduced rate and the shampoo, as a retail product, is at the standard rate.
| Item | Price paid | VAT in it | Rate |
|---|---|---|---|
| Hairdressing | €60 | €4.95 | 9% |
| Shampoo | €20 | €3.74 | 23% |
The product carries more VAT than the service despite costing a third as much. A till set up with one rate for everything would get at least one of these wrong.
A hotel. A guest pays €150 for a room and €60 for dinner. The room is a hotel letting at the reduced rate; since 1 July the meal is at the second reduced rate.
| Item | Price paid | VAT in it | Rate |
|---|---|---|---|
| Room | €150 | €17.84 | 13.5% |
| Dinner | €60 | €4.95 | 9% |
Before July both lines would have been at the same rate. If you sell packages, such as dinner, bed and breakfast for one price, check Revenue’s guidance on how to split the price between the parts.
How to add and remove VAT
Adding VAT. Multiply the net price by the rate and add it on. €100 plus VAT at the standard rate is €123.00.
Removing VAT. Divide the VAT-inclusive price by one plus the rate. A price of €123 including standard-rate VAT contains €23.00 of VAT and a net price of €100.00.
The most common mistake is to take the rate straight off a VAT-inclusive price. That removes too much, because the VAT was worked out on the smaller, net figure.
Here is €1,000 of net sales at each rate:
| Rate | VAT on €1,000 | Price including VAT |
|---|---|---|
| Standard | €230.00 | €1,230.00 |
| Reduced | €135.00 | €1,135.00 |
| Second reduced | €90.00 | €1,090.00 |
| Livestock | €48.00 | €1,048.00 |
| Zero | €0.00 | €1,000.00 |
| Line | Amount |
|---|---|
| Price excluding VAT | €41.28 |
| VAT at 9% | €3.72 |
| Price including VAT | €45.00 |
Zero-rated is not the same as exempt
Zero-rated supplies are taxable, just at 0%. A business that makes them, such as an exporter or a shop selling children’s shoes, charges no VAT to its customers but can still reclaim the VAT it pays on its own costs.Revenue
Exempt supplies are outside the VAT system. No VAT is charged, but the business cannot reclaim the VAT on the costs of making them. The difference matters for cash flow and for whether registering is worthwhile.
Do you need to register?
You must register for VAT once your turnover in a calendar year, excluding VAT, goes over the relevant threshold. Revenue sets different thresholds for businesses that supply services and businesses that mainly supply goods, and lower ones for distance sales and for goods bought in from other EU countries.Revenue Check the current figures on Revenue’s thresholds page before you reach them.
Below the threshold, you may choose to register. That can make sense if most of your customers are VAT-registered businesses, who can reclaim the VAT you charge, or if you make zero-rated supplies and want to reclaim VAT on your costs. It makes less sense if you sell mainly to the public, as your prices rise or your margin falls.
A checklist for small businesses
- Check the rate for each thing you sell, not just your main product. Mixed businesses such as hotels, cafés and salons that also sell retail products often have several rates.
- Update tills and invoice templates whenever a rate changes, and keep a note of the date.
- Price for the VAT-inclusive amount if you sell to consumers, and work backwards to your net price with the VAT calculator.
- Keep the VAT you collect separate from your own money: it belongs to Revenue and is paid over with your VAT return. Keep copies of your sales and purchase invoices showing the rate charged on each line, so that each return can be checked against them.
- Plan for your other taxes. If you trade through a company, profits are taxed separately: the Ireland corporation tax calculator estimates it at 12.5% on trading profits.Revenue If you employ staff, the employer cost calculator adds employer PRSI, which rose on 1 October 2026; our article on PRSI 2026 explains the change.
VAT calculator
Choose whether to add or remove VAT, enter the amount and pick the rate.
€123.00
- VAT
- €23.00
- Price excluding VAT
- €100.00
- Rate
- 23%
- Catering, restaurant meals, hot take-away food and hairdressing moved from 13.5% to 9% on 1 July 2026.
- Check Revenue's VAT rates database for a specific product: rates depend on exactly what is supplied.
Price including VAT: €123.00 €23.00 VAT at 23%
Show the breakdown
| Line | Amount |
|---|---|
| Price excluding VAT | €100.00 |
| VAT at 23% | €23.00 |
| Price including VAT | €123.00 |
For your own pay as an owner or employee, the Ireland salary calculator and Take-home pay in Ireland 2026 cover income tax, USC and PRSI.
