In line with the Programme for Government commitment the 9 per cent VAT rate will be reintroduced from 1 July 2026.

This rate will apply to food and catering services and to hairdressing. The measure will not apply to hotel accommodation but will apply to the food and catering provided by hotels.

As has been outlined by Government before, the objective of the measure is to support businesses in these services sectors who are facing increased cost pressures, and the measure is expected to support over 150,000 jobs in these sectors across the country.

The available CSO data for these sectors indicate that over 99% are SMEs with over half of those businesses being microenterprises with less than ten employees. In terms of benefits for this measure looking at the available data it is expected that approximately 85% of the benefit will go to SMEs.

Commenting today, the Tánaiste and Minister for Finance, Simon Harris T.D. said:

“This VAT reduction marks another important Government commitment being fulfilled. Unlike previous temporary reductions, this measure has no sunset clause.It establishes the 9% VAT rate for these supplies on a permanent basis, reflecting the Government’s assessment that this VAT rate is now appropriate for the long term."

"This will help thousands of businesses across Ireland and in turn will help secure approximately one hundred and fifty thousand jobs right across the country."

Commenting today, the Minister for Enterprise, Tourism and Employment, Peter Burke T.D. said:

“I welcome the introduction of the 9% VAT rate for the Hospitality sector from tomorrow, 1 July 2026. This measure was announced in Budget 2026 and will see a reduction in the VAT rate from 13.5% to 9% for businesses operating in the Food & Catering and Hairdressing sectors."

“This reduction represents the Government standing by its commitment in the Programme for Government to reduce the VAT Rate for the Hospitality sector. Our food-businesses, restaurants and cafes are vital to local economies across the country, providing economic activity and supporting the employment of over 170,000 people in both rural and regional towns and villages up and down this country."

“This VAT reduction will be particularly important for the many small and family-run hospitality businesses across Ireland who operate on very low profit margins and will inject viability into the sector.”

Commenting today, the Minister for Children, Disability and Equality Norma Foley T.D. said:

“This is a very welcome development for the hospitality industry. I have been a strong supporter of the Vat 9 measure because I know how important it is for the sustainability and success of the tourism industry."

"This sector supports thousands of good jobs across rural and urban communities. The vast majority of these jobs are in small to medium enterprises and as such they provide a vital stimulus for the growth and development of many rural areas, like I see every day in my home county of Kerry.“

Commenting today, theMinister of State for Employment, Small Business and Retail Alan Dillon T.D. said:

“The 9% VAT rate for hospitality and hairdressers is a positive and timely step for small and locally owned businesses that are the heartbeat of communities across Ireland."

"It will support cafés, restaurants and service providers to continue to grow and provide employment in towns and villages nationwide."

"Family-run enterprises are the backbone of these sectors, and I am particularly mindful of the role they play in both our local economies. This decision reflects the Government’s continued commitment to backing small businesses, protecting jobs, and ensuring our communities remain vibrant and resilient into the future."

Commenting today, the Minister of State at the Department of Further and Higher Education, Research, Innovation and Science Marian Harkin T.D. said:

"I welcome today's VAT reduction, it something I have called for a long time. It will be particularly important for the many SMEs across Ireland, they form the backbone of local communities and local economies. Today's announcement will bring us more in line with the rates in our nearest neighbors, especially in tourist destinations such as France and Spain."

"The hospitality sector has faced significant financial pressures in recent years due to rising costs. By reducing the VAT burden, this measure will provide much-needed financial relief, improve cash flow, and help businesses remain competitive. Crucially, it will inject greater viability into the sector, supporting jobs, encouraging investment, and helping ensure that cafés, restaurants, and other hospitality businesses can continue to serve their communities and contribute to Ireland’s tourism and economic growth."

Commenting today, the Minister of State for Trade Promotion, Artificial Intelligence and Digital Transformation Niamh Smyth T.D. said:

“The reintroduction of the 9% VAT rate delivers on a clear commitment in the Programme for Government and provides meaningful support to local businesses that are the cornerstone of communities across Ireland. As Minister with responsibility for Trade Promotion, I know how important it is that indigenous businesses are supported to grow, compete and thrive in today's business environment."

“This move will help these businesses to remain competitive, protect jobs and continue serving customers in towns, villages and cities throughout the country.”