Irish VAT Rates 2026: Standard, Reduced & Zero Categories

Ireland's VAT system operates at four main rates, determined by the category of goods or services supplied. Most standard purchases — electronics, adult clothing, software, alcohol — attract the 23 percent standard rate. Certain essential goods and services are reduced- rated or zero-rated under EU VAT Directive rules that Ireland has incorporated into national law and administers through the Revenue Commissioners. Knowing which rate applies matters for pricing, invoicing, and reclaiming VAT, and getting it wrong on a sales invoice is a compliance problem rather than a rounding quibble.

Irish VAT Rates at a Glance

Zero-Rated Versus Exempt

Zero-rated and exempt are not the same thing, and the difference is commercially important. A zero-rated supply is taxable at a rate of 0 percent, so the trader charges no VAT to the customer but can still reclaim the VAT paid on related business inputs. An exempt supply — such as certain financial services, insurance, education, and medical care — carries no VAT either, but the supplier generally cannot reclaim input VAT. For a business deciding how a product is treated, that distinction determines whether VAT on purchases is recoverable.

Which Rate Applies to Food?

Food rates are one of the most frequently asked questions, because the same item can fall under different rates depending on how it is sold. The 0 percent rate applies to most unprocessed food bought in shops and supermarkets — bread, meat, fish, fruit, vegetables, milk. The 9 percent rate applies to food served in a restaurant, cafe, or hotel, where the supply is treated as a catering service rather than a grocery sale. Crisps, sweets, chocolate, and other confectionery are excluded from the 0 percent rate and taxed at the full 23 percent standard rate, as are most soft drinks. Hot takeaway food is generally treated as catering at the reduced rate rather than as zero-rated groceries.

VAT on Digital Services

Digital services sold to Irish consumers are taxed at the Irish standard rate of 23 percent. Since the EU's 2015 reform of the place-of-supply rules, VAT on electronically supplied services — streaming, software-as-a-service, downloadable content, apps — is charged at the rate of the customer's country rather than the supplier's. A provider based elsewhere in the EU therefore charges Irish VAT to an Irish consumer, typically accounting for it through the One Stop Shop scheme rather than registering separately in every member state.

VAT Registration and Thresholds

A business must register for VAT once its turnover exceeds the relevant annual threshold, and may register voluntarily below it. Ireland operates separate thresholds for the supply of goods and the supply of services, with the goods threshold set higher than the services threshold. Once registered, a trader charges VAT at the correct rate on sales (output VAT), reclaims VAT incurred on business purchases (input VAT), and pays Revenue the difference, usually on a bi-monthly return. A business making only exempt supplies cannot register and therefore cannot reclaim input VAT, which is why the zero-rated versus exempt distinction affects pricing decisions well before the first return is filed.

Adding and Removing VAT

To add VAT, multiply the net amount by one plus the rate: a net price of 100 at 23 percent becomes 100 times 1.23, which is 123. To work backwards from a VAT-inclusive price to the net figure, divide rather than subtract: a gross price of 123 at 23 percent is 123 divided by 1.23, which is 100, and the VAT element is 23. Subtracting 23 percent from the gross price is a common error that gives the wrong answer, because the percentage was applied to the smaller net base, not the larger gross total. To run any Irish or custom rate without risking that mistake, use the VAT calculator, which adds or removes VAT at 23 percent, 13.5 percent, 9 percent, 0 percent, or any rate you enter for cross-border EU calculations.