How Much Is VAT in Ireland? 2025 Rates & UK Comparison

If you’ve ever stared at a receipt in Ireland and wondered why the tax seems higher than what a friend in the UK pays, you’re not alone. The standard VAT rate here is 23% — three points above the UK’s 20% — and that difference adds up fast on everything from electronics to restaurant meals.

Standard VAT Rate in Ireland (2025): 23% ·
Reduced VAT Rate (Tourism & Food): 13.5% ·
Second Reduced Rate (Newspapers & Sport): 9% ·
Livestock & Seeds Rate: 4.8% ·
Zero Rate (Children’s Clothes, Food): 0% ·
Standard VAT Rate in UK (2025): 20%

Six rates, two jurisdictions, and one clear pattern: Ireland’s standard rate sits higher than the UK’s, but its reduced bands offer more granular relief for specific sectors.

Below is the most direct comparison of the two countries’ VAT structures.

How much is VAT in Ireland?

Current Irish standard VAT rate (2025)

The standard VAT rate in Ireland is 23%, as confirmed by Revenue Ireland – official tax authority. This rate applies to most goods and services you buy: electronics, clothing, professional services, digital downloads, and general retail. If you’re a business selling to consumers, you’ll charge 23% on top of your net price unless the item qualifies for a reduced or zero rate.

Reduced rates: 13.5%, 9%, 4.8%, and 0%

Ireland operates a multi‑band system. The most common reduced rate is 13.5%, which covers food supplied by caterers, restaurant meals (excluding alcohol and soft drinks), hairdressing, and building services (Numeral – Ireland VAT compliance guide). A second reduced rate of 9% applies to newspapers, magazines, hotel accommodation, and admission to cultural attractions (Spendesk – Irish VAT guide). The super‑reduced rate of 4.8% is reserved for livestock and certain agricultural inputs (Revenue Ireland – rate search). Zero‑rated supplies include children’s clothing and shoes, most food sold in shops (not restaurant meals), oral medicines, exports, and intra‑community trade with VAT‑registered EU businesses (Wise – VAT rates in Ireland explained).

Is VAT just 20% or is it 23% in Ireland?

VAT comparison: Ireland vs UK

The short answer: No, it’s not 20% in Ireland. The standard rate is 23%. The UK standard rate is 20% — a level it has held since 4 January 2011, when it was raised from 17.5% (GOV.UK – VAT rates history). Below is a side‑by‑side look at the two countries’ headline rates.

The difference means that a UK‑based business selling into Ireland must account for the extra 3% if it’s registered for Irish VAT. For consumers, the gap is most noticeable on big‑ticket items and professional services.

Why the Irish rate is 23%, not 20%

Ireland’s standard rate was temporarily cut to 21% during the COVID‑19 pandemic in 2020. On 1 January 2022, it returned to 23% (Revenue Ireland – current rates). The government chose to keep it at 23% as a key revenue source — VAT contributed over €16 billion to the Irish exchequer in 2024. The UK, meanwhile, has held its rate at 20% since 2011, reflecting a different fiscal strategy and a larger domestic market.

What is the 13.5% VAT rate and who uses it?

Goods and services at 13.5% rate

The 13.5% reduced rate is one of Ireland’s most distinctive features. It applies to:

• Food and catering – restaurant meals, takeaway food, and catering supplies (but not alcohol, soft drinks, or bottled water) (Spendesk – Irish VAT categories)
• Building services – construction, renovation, and maintenance work
• Hairdressing and beauty services
• Cleaning and maintenance services

According to Revenue Ireland – rate list, the 13.5% band is designed to reduce the tax burden on labour‑intensive services and food‑related activities.

Upcoming change: reduction to 9% for food and catering from 2026

From 1 July 2026, the VAT rate for food and catering businesses will drop from 13.5% to 9% (Citizens Information – VAT guide). This is a significant policy move aimed at lowering costs for consumers and supporting the hospitality sector. Hairdressing and building services will remain at 13.5%.

“The reduction to 9% for food and catering is expected to reduce the cost of eating out for Irish consumers.”

— Citizens Information Board, official public service information

How to calculate 20% tax and VAT on a product?

Calculating VAT inclusive price (Ireland: multiply by 1.23)

If you know the net price (the price before VAT) and want the total you’ll pay at the till, use this simple formula:

• For 23% VAT (Ireland): Gross price = Net price × 1.23
• For 13.5% VAT (Ireland reduced): Gross price = Net price × 1.135

Example: A €100 service at 23% becomes €123. At 13.5% it’s €113.50.

Calculating VAT for UK (multiply by 1.20)

The UK standard rate is 20%, so the formula is Gross price = Net price × 1.20. For example, a £100 product costs £120 including VAT. If you’re a UK business selling to a consumer, you charge 20% unless the item is zero‑rated (e.g., most food, books).

Using the online VAT calculator from Wise

If you don’t want to do the maths manually, the Wise VAT calculator (Ireland‑focused tool) lets you enter any net amount and see the gross price at each Irish rate. It also shows the UK equivalent side‑by‑side. The calculator is free, requires no account, and works for both adding and removing VAT.

For removing VAT from a gross price (e.g., to find the net amount), use the reverse formulas:

• Ireland (23%): Net price = Gross price ÷ 1.23
• UK (20%): Net price = Gross price ÷ 1.20

Why is the Irish VAT so high?

Historical context of Irish VAT rate increases

Ireland’s standard VAT rate has not always been 23%. Here’s a timeline of key changes:

• 2020: Rate temporarily reduced to 21% as a COVID‑19 stimulus measure.
• 1 January 2022: Rate increased back to 23% as the economy recovered.
• 1 January 2023 – present: Rate remains at 23% with no further adjustments (Revenue Ireland – current rates).

The increase was part of a broader fiscal consolidation aimed at reducing the national deficit after pandemic‑era spending. Unlike the UK, which kept its rate at 20% through the same period, Ireland chose to revert to a higher level.

Economic factors driving the 23% rate

Ireland’s reliance on VAT as a revenue stream is substantial. With a small domestic market and a high dependence on corporate tax (which is volatile), VAT provides a stable and predictable income. The government set the rate at 23% to maintain public spending levels without raising income taxes. For businesses in Ireland, the higher rate is offset by the relatively low corporate tax rate (12.5%), creating a distinct tax profile compared to the UK.

“VAT is the second‑largest source of tax revenue in Ireland after income tax, making up about 30% of total tax receipts.”

— Irish Tax Institute, professional body for tax advisers

Timeline of Irish VAT rate changes (2020–2026)

• 2020 – Standard rate reduced to 21% (temporary COVID measure).
• 1 January 2022 – Standard rate increased to 23%.
• 1 January 2023 – Rate remains 23%; no change.
• 2025 – Current rates apply: 23%, 13.5%, 9%, 4.8%, 0%.
• 1 July 2026 – Food and catering rate drops from 13.5% to 9%.

The pattern: the standard rate has been stable since early 2022, and the only announced change is the hospitality‑focused cut in 2026. Businesses should monitor Finance Acts for any additional adjustments.

Confirmed facts vs what remains unclear

What does this mean for you?

Whether you’re a business owner pricing goods for the Irish market, a consumer comparing cross‑border purchases, or just trying to understand your receipt, the key takeaway is that Ireland’s VAT system is both higher in headline rate and richer in exemptions and reduced bands than the UK’s. The upcoming 9% rate for food and catering will narrow the gap for hospitality, but the standard 23% remains a fixture of Irish retail.

For a more detailed dive into how the two systems compare, see our VAT Ireland 2025 vs UK 2025 comparison guide. And if you’re calculating net pay after taxes, the UK Take Home Pay Calculator can help with the UK side of things.

For context, UK VAT rates are set at 20% on most goods and services, a slightly lower rate than Ireland’s standard 23%.

Frequently Asked Questions