Ireland increases VAT to 22% in 2013 and 23% in 2014

Update 7 November 2011 - reports indicate that Ireland may accelerate the below planned rises to 2012. Click here to read more on Irish VAT hike plans.

24 November 2010

It has been announced today that the Irish government plans to raise its standard VAT rate from 21% to 22% in 2013, and then from 22% to 23% in 2014. There will be no change to the corporation tax rate.

This comes as part of a package of austerity measures tied to the recently agreed EU and IMF bail-out, which could reach Euro 85 billion.

Ireland last tried to increase its VAT rate in 2008 with a 0.5% rise to 21.5%. However, due to lost trade over the Northern Ireland border with a much lower VAT rate, it had to retract this rise by the end of 2009. Since the UK is now due to raise its VAT rate to 20% from January 2011, it seems that the Irish government felt more confident about a fresh increase to help meet renewed financial pressures from the bond markets.

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