Catering Firms Benefiting From 9% VAT Rate As Smaller Tourism Businesses Miss Out
It is being reported that leading contract catering firms in Ireland are availing of country's 9% VAT rate on food, tourism and hospitality services, while some smaller tourism businesses continue to be denied the reduced rate.
The Irish Times reports that Ireland's 9% VAT rate, which was introduced as a temporary measure in 2011 at an estimated cost of of €350m to taxpayers annually, is being used by large contract catering firms who have contracts to run the staff canteens at the likes of Apple, Google and Facebook.
Meanwhile, smaller tourism businesses around the country country, such as Westport's award winning Clew Bay Bike Hire, continue to be denied the tax break.
"A different rate cannot be applied to such services depending on location or customer base. It is not possible to charge different VAT rates to catering services who supply to businesses and tourists," said the Department of Finance.
Chief executive of the Irish Tourist Industry Confederation Eoghan O’Mara Walsh pointed out that while there are "kinks in the system down to how the Revenue applies the special rate, we think it is a good policy and there is no cost to retaining it".