Ireland’s Department of Finance announced a six-month extension of the 9% reduced VAT rate on gas and electricity, moving the end date from 30 April to 31 October 2025.
This announcement was made by the Irish Department of Finance on 1 April 2025.
The government agreed to maintain the reduced rate from 1 May to 31 October 2025. The VAT rate had previously been scheduled to revert to the standard 13.5% from 1 May.
A Financial Resolution was introduced in the Dáil on 2 April 2025 to provide the necessary legal basis for the extension.
The reduced 9% VAT rate was first introduced on 1 May 2022, following a 2022 amendment to Annex III of the EU VAT Directive, which allowed reduced VAT rates to apply to gas and electricity.
No decision has been made regarding any further extension. This will be considered as part of the normal budget process.
The estimated cost of the extension is EUR 85 million. The net benefit to households over the six-month period is expected to be approximately EUR 26.60 for electricity and EUR 20.28 for gas.
Irish Minister for Finance Donohoe stated:
“The Programme for Government acknowledges the increased energy cost pressures on households and businesses, and this extension of the reduced 9% rate is in line with the commitments made in our Programme to mitigate these pressures in whatever way we can. In addition, I am conscious of the fact that energy prices are beginning to increase again and believe in this context that it is appropriate to extend the existing support.”
