The standard rate of Irish VAT is 23%. That is the one-line answer, and it is the easy part — most of the work is deciding which of the other four rates applies to what you actually sell, and getting the 1 July 2026 change right.
This post covers every rate in force, what changed on 1 July, which rate applies to the trades it affects most, and how the rates map 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 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 people 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. It is the difference between reclaiming the VAT on what you buy and swallowing it.
Which rate applies to your trade
Most businesses charge one rate on nearly everything and a second on a handful of lines. The exceptions are where the money is lost.
| If you are a… | You charge | Watch for |
|---|---|---|
| Hairdresser or barber | 9% on services from 1 July 2026 (13.5% before) | Retail products you sell over the counter stay at 23% |
| Café, restaurant or takeaway | 9% on food from 1 July 2026 (13.5% before) | Soft drinks and alcohol stay at 23%, whatever the food rate is |
| Hotel or guesthouse | 13.5% on the room | Food is 9%, the bar is 23% — one folio, three rates |
| Electrician, plumber, builder | 13.5% on labour | Materials sold separately are 23%; reverse charge applies between principal and subcontractor |
| Garage or motor repair | 23% | Parts and labour are both standard rate |
| Shop or retailer | 23% | Most food and children's clothing are zero-rated, not exempt |
| Farmer | 4.8% on livestock | Unregistered farmers charge the flat-rate addition instead of VAT |
| Landlord (residential) | No VAT | Residential letting is exempt — no VAT3 at all |
If your own paperwork has more than one rate on it, that is normal and it is exactly where a return goes wrong. You can see a worked period for several of these — every document, every rate, and the VAT3 that comes out — in the café, hairdresser, tradesperson and garage examples.
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 are at 13.5%; invoices dated 1 July 2026 and later are at 9%. It is the date on the document that decides, not the date you paid it or the date you are doing the books. Anything that spans the change — a monthly supplier statement, a hotel folio, a week's takings — has to be split by line rather than totalled at one rate.
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.
If you file your own VAT3
You do not need any of the codes below. A VAT3 asks for four figures:
- T1 — the VAT you charged on sales in the period
- T2 — the VAT you were charged on purchases
- T3 — what you owe, when T1 is bigger
- T4 — what you are owed back, when T2 is bigger
The rates matter because T1 is the sum of what you charged at each rate, and getting a rate wrong moves that figure. A hairdresser who kept charging 13.5% after 1 July overstates T1 and pays Revenue money they did not owe; one who applied 9% too early understates it and owes the difference.
The other thing to watch is what you can reclaim in T2. Petrol is not reclaimable. Entertaining clients is not reclaimable. Food and drink for yourself or your staff is not reclaimable. These sit in the middle of ordinary receipts and quietly inflate T2 if you total everything.
Rather than describing it, here is a hairdresser's VAT3 worked from sixteen documents — sales at 9% and 13.5%, retail products at 23%, and the four figures at the bottom.
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, which unhelpfully collide with the VAT3 box names above — Sage's T1 is the standard rate, while the VAT3's T1 is VAT on sales. They are unrelated. The defaults also 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 checklist
Before you file a VAT3:
- Group your sales and purchases by rate and check each group is what you think it is
- 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 your books. Get it wrong and you spend an evening unwinding misclassifications before the deadline.
Doing this yourself? KrinoDoc reads the rate off each document and groups a period into the four VAT3 figures, so the arithmetic above is done for you and you check it rather than do it. There are worked examples for fourteen trades — real documents, no signup — or start with your own.
This post is general information about Irish VAT rates, not tax advice, and rates change with each Budget. Revenue's VAT rates database is the authority.