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Ireland – reduced VAT rate of 9% on tourism services maintained until 2013
This reduced rate of 9% applies to tourism services such as hotel accommodation, restaurant meals, admissions to cinemas, theatres, certain musical performances, museums and art gallery exhibitions; other tourist attractions and leisure facilities.
Upon its introduction in 2011, there were some concerns expressed that businesses would not pass the reduction in price on to the consumer. Latest figures show however that, by and large, the reduction has been passed on.
Since its introduction in 2011, businesses in the tourism sector have seen an increase in visitor numbers in 2011, which has led to an increase in employment in this sector.
Minister Varadkar said that “early indications are that the policy is working. Employment among accommodation and food providers has increased by around 6,300 since July last year”, while the Restaurant Association of Ireland commented that “70% of restaurants have said the reduction of the VAT rate in 2011 has helped business, with 30% directly attributing the VAT reduction to hiring new staff.”
This announcement now provides the tourism sector with an assurance that the reduced VAT rate will remain until the end of 2013, which will allow businesses to plan for the 2013 season.
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