European Commission seeks reviews of Ireland's low rates of Vat

The European Commission has called on the Government to install “systematic” reviews of all its reduced rates for Vat, such as its low level of tax on hotels and restaurants, and has warned again on the State relying too much on corporate taxes.

In its country report on Ireland, the commission highlighted the growing number of demands on the public purse at a time when the economic recovery faces potential threats from abroad. It said that though economic prospects “remain bright”, the risks of Brexit and from the potential overhaul of international tax regimes could undermine decisions by multinationals to invest in the country.

On the reduced levels of Vat, the commission said there was no “systematic process for evaluating the costs and benefits of reduced Vat rates”.