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Digital VAT hike to create a level field

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female with tablet

female with tablet

female with tablet

Well, 2015 certainly got off to a good start ... for Revenue.

Not only is the Local Property Tax pouring into their coffers, but new EU rules mean that from January 1, VAT is now payable on digital purchases at the full Irish rate of 23pc - already one of the highest in the EU.

While the intention is to create a level playing field across member states and avoid companies deliberately selling digital products like e-books, apps and streaming services, at very low or zero rates from countries which don't charge VAT, it does mean that Ireland gets hit the hardest, as will Luxembourg, which up to now had a 3pc VAT rate on books - with the result that many book companies operated from there, technically at least, to avail of it.

It could be good for us if more digital providers like Amazon decided to move here to join other multi-nationals like Google and Microsoft, but for Irish customers, it may mean that products they were used to getting tax free, including school books which were zero rated may now carry a hefty 23pc premium if they are bought online, while those in print will not change.

Absorb

For now, if you're buying any digital or e-products, you can expect to pay more for some of them.

This includes streaming services like cable television, although Sky TV has said it will (at least initially) absorb the difference between the UK and Irish VAT rates of 3pc.


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