Ireland VAT Rates: 2025 Changes!

In Ireland's 2025 State Budget, the government has decided to extend the temporary VAT reduction on gas and electricity to 9%, effective from October 31, 2024, until April 30, 2025. This reduced rate was first introduced on May 1, 2022, and has been extended multiple times to alleviate the impact of inflation. Additionally, starting January 1, 2025, the VAT for the supply and installation of heat pumps will decrease from 23% to 9%. These measures aim to support consumers amidst rising living costs and encourage the adoption of renewable energy solutions.

In Ireland's 2025 State Budget, the government has decided to extend the temporary VAT reduction on gas and electricity to 9%, effective from October 31, 2024, until April 30, 2025. This reduced rate was first introduced on May 1, 2022, and has been extended multiple times, delaying the planned increase back to 13.5% that was set for November 1, 2024. Additionally, starting January 1, 2025, the VAT for the supply and installation of heat pumps will decrease from 23% to 9%.

These temporary VAT reductions were initially implemented to help reduce the impact of inflation. For example, VAT for sectors like tourism, hospitality, and hairdressing reverted to 13.5% in August 2023, ending the previous lower rate of 9%.