title: "Irish VAT rates in 2026 — what's changing on 1 July and how to map them in QuickBooks, Xero, and Sage" date: "2026-04-28" description: "Ireland's VAT rates as they stand in April 2026, the 1 July 2026 reduction for restaurants and hairdressing, and the practical question every bookkeeper has to answer: which T-code do I post this to?"
If you're posting purchase invoices for Irish clients, you have to assign each line to the right VAT rate. Get it wrong and the VAT3 return doesn't reconcile, the client overpays or underpays Revenue, and you end up reworking months of postings.
This post covers the VAT rates currently in effect in April 2026, what's changing on 1 July 2026, and how to map them to QuickBooks Online, Xero, and Sage.
Always verify against the Revenue VAT rates database before posting. Rates change with each Budget and the database is the only authoritative source.
The Irish VAT rates in April 2026
| Rate | Name | Used for (examples) |
|---|---|---|
| 23% | Standard | Most goods and services — professional fees, electronics, alcohol, soft drinks, cars, petrol, diesel, adult clothing |
| 13.5% | Reduced | Construction services, hotel accommodation, restaurant meals & catering, hairdressing, heating oil, cleaning services, cinema admission |
| 9% | Second reduced | Gas and electricity, EV charging, sporting facility admission, live theatrical performances, tour guide services |
| 4.8% | Livestock | Live cattle, sheep, pigs, goats, horses sold to VAT-registered farmers and meat processors |
| 0% | Zero | Most food, children's clothing and footwear (up to age 11), printed and digital newspapers, books, e-books, audiobooks, oral medicines, exports outside the EU |
Plus Exempt (not a rate — VAT doesn't apply): financial services, insurance, education, most medical services, postal services. And Outside the scope: salary, dividends, certain grants.
The trap most practices fall into: treating "Exempt" and "Zero-rated" as the same. They are not. Zero-rated supplies still entitle you to recover input VAT; exempt supplies do not.
What's changing on 1 July 2026
Budget 2026 (announced October 2025) made two structural changes that affect bookkeeping:
1. Restaurant food, catering, and hairdressing drop from 13.5% to 9% — permanently — from 1 July 2026.
This applies to most food and certain drinks supplied in a restaurant, café, hotel, bar, takeaway, or other catering setting, plus hairdressing services. It does not extend to:
- Hotel accommodation or short-term rentals (stays at 13.5%)
- Admissions to tourist attractions (stays at 13.5%)
- Alcoholic drinks (stays at 23%)
- Soft drinks (stays at 23%)
Practical implication: invoices dated 30 June 2026 and earlier post at 13.5%; invoices dated 1 July 2026 and later post at 9%. Watch out for invoices that span the change date — supplier statements covering June and July may need to be split by line.
2. The 9% rate on gas and electricity (and EV charging) is extended to 31 December 2030.
This was originally a temporary energy-crisis measure that has been extended several times. Budget 2026 extended it to end-2030, giving longer planning certainty.
Mapping to QuickBooks Online (Ireland)
QuickBooks ships with the Irish VAT codes preconfigured if you select Ireland on company setup. The codes you'll see:
- S — Standard 23%
- R — Reduced 13.5%
- R2 — Second reduced 9%
- Z — Zero rated (sales)
- EZ — Exempt
- NA — No VAT / out of scope
If you imported a chart of accounts from a UK template, double-check — UK rates (20%, 5%, 0%) will be wrong for an Irish entity.
After 1 July 2026 you'll need to swap R for R2 on restaurant meals, catering, and hairdressing lines. No code changes are required for energy bills (they were already at R2 / 9%).
Mapping to Xero (Ireland)
Xero's Irish tax rates use longer descriptive names rather than letter codes:
- 23% (VAT on Income / Expenses) — standard
- 13.5% — reduced
- 9% — second reduced
- Zero Rated Income / Expenses
- Exempt Income / Expenses
- No VAT — for out-of-scope items like salaries
Watch out for the difference between VAT on Income and VAT on Expenses — both at 23%, but applied to opposite sides of the ledger. Posting an expense to a sales code is a common mistake when copying lines from a sales invoice template.
Mapping to Sage (Ireland)
Sage uses T-codes. The defaults vary slightly between Sage 50 and Sage Business Cloud Accounting, so check yours, but typically:
- T1 — Standard 23%
- T2 — Exempt
- T0 — Zero rated
- T3 — Reduced 13.5%
- T9 — Outside the scope
If you're migrating between Sage products, do not assume T-codes carry over identically — verify the mapping in your specific version before bulk-posting.
What this means for invoice automation
If you're using automated invoice processing software, the VAT rate has to be extracted from each line of the supplier's invoice and mapped to the right code in your accounting system. This is where most automation falls down — the supplier writes "VAT 23%" or "@23%" or "Standard rate", and the software has to recognise all of those as the same thing, then map them to S in QuickBooks, 23% in Xero, or T1 in Sage.
Software also has to handle the rate-change moments: a single supplier statement that crosses 1 July 2026 will contain lines at both 13.5% and 9% for the same service, and the date — not the line description — is what determines the correct code.
KrinoDoc detects Irish VAT rates from invoice line items and exports them with the correct codes for QuickBooks, Xero, and Sage. If you're spending hours every week re-coding VAT lines, that's exactly the kind of work that should be automated.
Common pitfalls
- Hotel/restaurant invoices mix multiple rates. Pre-1 July: 13.5% (accommodation, food) and 23% (alcohol). Post-1 July: 13.5% (accommodation), 9% (food), 23% (alcohol). One invoice, three rates. Don't lump them.
- Construction services — 13.5% for the labour, 23% for any standalone materials sold separately. Reverse charge applies between principal contractors and subcontractors when both are VAT-registered (RCT and VAT reverse charge are separate but often go together).
- EU acquisitions — reverse-charge mechanism. The supplier doesn't charge Irish VAT; you self-account in the VAT3 return on both sides at the rate that would have applied if the goods were bought in Ireland.
- Imports from outside the EU — VAT is paid at the point of import. The clearance agent's invoice (with the VAT charge) is what posts to the books, not the supplier's overseas invoice.
- Newspapers are zero-rated since January 2023 — including digital subscriptions. If you're still posting at 9%, you're overstating output VAT on sales and understating input VAT recovery on purchases.
- Energy bills (gas, electricity, EV charging) are 9%, not 13.5%. The 9% rate was temporary when introduced; it's been extended to 31 December 2030.
VAT3 reconciliation checklist
Before you file a VAT3:
- Run a VAT detail report grouped by rate
- Check that 13.5% turnover lines are construction / hotel accommodation / heating oil — not professional fees miscoded
- Reconcile zero-rated sales to your export documentation
- Confirm reverse-charge entries appear in both the sales VAT and purchase VAT boxes
- Verify your input VAT recovery rate if the entity has any exempt activity (financial services, insurance, education, medical)
- After 1 July 2026: confirm restaurant / catering / hairdressing lines are posted to the 9% code, not 13.5%
Get this right and the return matches the trial balance. Get it wrong and you spend an evening unwinding misclassifications before the deadline.