VAT rate for hotels must be reduced to 10%, says IHF

THE rate of VAT for hotels and restaurants should be reduced from 13.5% to 10% in the budget, the Irish Hotel Federation (IHF) urged yesterday.

In its pre-budget submission, the IHF says the increase in VAT last year was damaging the industry and making the country even more uncompetitive. It said that reducing VAT would bring Ireland in line with other European countries.

The IHF also wants the Government to allow VAT as a business input. It said hotel and restaurant costs are recognised as legitimate business expenses in most EU economies, but not in Ireland. “An Irish VAT registered company can reclaim the VAT on accommodation and restaurant charges, incurred for business reasons, in most European countries but does not benefit from the same treatment at home in Ireland,” the IHF said.