Dáil Éireann Debate, Thursday - 13 July 2023
291. Deputy Mick Barry asked the Minister for Finance if he is considering changing the VAT thresholds in Budget 2024; if he will consider reforms that consider ability to pay or that is graduated; and if he will make a statement on the matter. [34975/23]
View answerAs the Deputy will be aware, it is a longstanding practice that the Minister for Finance does not comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.
The VAT registration thresholds are subject to the requirements of EU VAT law, with which Irish VAT law must comply. Our VAT thresholds were increased to their current values, €37,500 for services and €75,000 for goods, on 1 May 2008. Under VAT law, traders/businesses such as B&B’s are required to register and account for VAT where their supply of guest or holiday accommodation exceeds the services threshold.
It is important to note that Ireland’s current registration thresholds are some of the most generous thresholds in the EU. Some Member States do not operate any VAT registration threshold, requiring all businesses to register. As an administrative practice, Revenue allow businesses that are approaching the threshold to take account of the VAT element of their Purchases-for-Resale in calculating turnover. This avoids a ‘cliff-face’ effect when approaching the threshold.
