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9% VAT rate introduced

Ireland took a step towards greater competitiveness with its nearest neighbour with the introduction of the new nine per cent VAT rate on services related to tourism such as hospitality this month.

The move follows that of France which, through lobbyist Jacques Borel, secured a VAT reduction to 5.5 per cent for the accommodation industry there.

And while the UK has no plans to monitor the results of the Irish VAT cut, the British Hospitality Association argues that Britain’s 20 per cent VAT rate makes UK tourism “uncompetitive” compared to almost all key European competitors now. In Italy, it’s 10 per cent; in Spain, it’s eight per cent and in Germany it’s seven per cent.

From 1st January 2014 the rate on these goods and services will revert to 13.5 per cent, the Government has stated.

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