Ireland's Government has reintroduced the 9% VAT for food and catering services and hairdressing from 1 July 2026 on a permanent basis, with the measure expected to support more than 150,000 jobs and primarily benefit SMEs facing increased cost pressures.
Ireland’s Government has announced, on 30 June 2026, the reintroduction of the 9% VAT rate for food and catering services and hairdressing from 1 July 2026, delivering a commitment set out in the Programme for Government.
According to the Department of Finance, the reduced VAT rate applies to food and catering services and to hairdressing. While the measure does not apply to hotel accommodation, it does cover food and catering services provided by hotels.
The government said the measure is intended to support businesses in these sectors facing increased cost pressures and is expected to support more than 150,000 jobs across the country.
Official Central Statistics Office (CSO) data cited by the department indicate that more than 99% of businesses in the affected sectors are small and medium-sized enterprises (SMEs), with more than half classified as microenterprises employing fewer than 10 people. Based on the available data, approximately 85% of the benefit from the measure is expected to go to SMEs.
Commenting on the measure, Tánaiste and Minister for Finance Simon Harris T.D. said: “This VAT reduction marks another important Government commitment being fulfilled. Unlike previous temporary reductions, this measure has no sunset clause. It establishes the 9% VAT rate for these supplies on a permanent basis, reflecting the Government’s assessment that this VAT rate is now appropriate for the long term.”
“This will help thousands of businesses across Ireland and in turn will help secure approximately one hundred and fifty thousand jobs right across the country.”
