The rates in force
These are the rates that apply from 1 January 2026, as published by Revenue. The standard rate has been 23% since January 2012, and the reduced and second reduced rates have been stable for several years. What changes from year to year is which goods and services sit in each band.
| Rate | Percentage | Typical application |
|---|---|---|
| Standard | 23% | Most goods and services, including professional services, electronics, alcohol, adult clothing and furniture |
| Reduced | 13.5% | Construction and repair, heating fuel, most building services, short-term car hire, cleaning and maintenance |
| Second reduced | 9% | Gas and electricity supplies, newspapers and periodicals, sporting facilities, certain apartments |
| Livestock | 4.8% | Livestock, live greyhounds and the hire of horses |
| Zero | 0% | Most food, children's clothing and footwear, oral medicines, books, exports and intra-EU B2B supplies |
| Exempt | n/a | Financial services, insurance, medical services, education, letting of property |
The 9% hospitality change from 1 July 2026
Budget 2026 confirmed that from 1 July 2026 the second reduced rate of 9% applies to hairdressing services, and to food and drink supplied as part of a restaurant, catering or hot takeaway service.
The exclusions matter as much as the inclusion. Alcohol, bottled waters, soft drinks, sports drinks and vegetable juices stay at the standard rate. A restaurant therefore runs two rates across a single bill, and the till system has to split them correctly at the point of sale rather than at the end of the period.
If you operate in hospitality, the practical work is in the till and the menu mapping, not in the return. A wrongly mapped product line quietly misstates every VAT3 for the rest of the year.
Other rate changes confirmed for 2026
- The flat-rate addition for farmers falls from 5.1% to 4.5% with effect from 1 January 2026.
- The 9% rate on gas and electricity supplies is extended until 31 December 2030.
- From 8 October 2025, the 9% rate applies to the supply of certain apartments as a social policy measure, until 31 December 2030.
Working out which rate applies
Most disputes about VAT rates in Ireland are not arguments about the percentages. They are arguments about classification — whether a particular supply belongs in one band or another.
Food is the hardest category
Most food for human consumption is zero-rated, but confectionery, chocolate biscuits, crisps, ice cream and soft drinks are standard-rated, and food supplied in the course of catering has its own treatment. Two products that look identical on a shelf can carry different rates.
Construction has a two-thirds rule
Where a supply involves both goods and a service, the two-thirds rule can push the whole supply to the standard rate if the cost of the goods exceeds two-thirds of the total price. Building contractors get caught by this regularly on supply-and-fit work.
Mixed and composite supplies
Where you sell a package containing items at different rates, you need to decide whether it is a single composite supply taking one rate, or a multiple supply to be apportioned. Revenue has published guidance on this, and it is worth checking before you set a price rather than after.
What an incorrect rate actually costs
If you undercharge VAT, the liability is yours. Revenue assesses the shortfall against you, with interest, and you are rarely in a position to go back to customers eighteen months later to collect it. If you overcharge, you have quietly been reducing your own margin, and reclaiming it involves correcting returns and, in many cases, refunding customers first.