Zero rating of VAT to remain on Covid tests

A Covid-19 rapid antigen test (lateral flow self test) showing a positive result. Picture date: Tuesday January 18, 2022.

Covid-19 testing kits are to remain being subject to zero rating of tax, it's been announced.

The announcement was made today by Finance Minister Michael McGrath, who said the decision is "important" due to the ongoing circulation of the virus and its impact on healthcare systems.

VAT on supplies of Covid-19 testing kits had been subject to a temporary zero rate up until the end of 2022 as a result of an EU Commission derogation.

However, today it was revealed that the kits will be zero rated on an ongoing basis with immediate effect.

"This zero rating of Covid-19 testing kits will be put on a legislative basis at the first available legislative opportunity," said a department spokesperson.

"In the meantime, however, Revenue have agreed to operate it with immediate effect on an administrative basis."

Minister McGrath said: “I believe this is an important issue to address as Covid-19 testing kits are one of the tools available in the fight against Covid-19 which still remains in general circulation at significant levels. 

"In my view costs of such testing kits should be kept to a minimum, and this is the context in which I am zero rating VAT on these products with immediate effect.”