The Revenue Commissioners have deferred the decision to Apply 23% VAT to All Food Supplements until 1st November 2019
Since 1973, most food supplements in Ireland have been supplied at the Zero rate of VAT, in accordance with guidelines published by the Revenue Commissioners.
In December 2018, the Revenue Commissioners decided that 23% VAT should apply to all food supplements from 1st March 2019.
In recent months, the threat of VAT being applied to food supplements has been raised in the Dáil on many occasions.
Acting on misleading advice received from the Revenue Commissioners, the Minister has justified the VAT increase in his responses to various Dáil questions, as below:
- ‘Revenue has only ever allowed basic vitamins, minerals and fish oils to apply at the Zero rate and this has not changed’ (Dáil Eireann: 14th November 2018).
This is untrue. Until 2018, Revenue’s own website had Zero VAT entries for food supplements as diverse as Royal Jelly Capsules, Ginseng Tablets and Garlic Capsules. These entries were recently removed by Revenue to conceal that they had ever allowed Zero VAT for these products, but you can see the original screenshots for yourself here.
Revenue have also issued hundreds of Zero VAT rulings to suppliers for most types of food supplements, e.g. Probiotics and Fibre.
- ‘Revenue’s position is that food supplements are not food and, as such, are not entitled under VAT law to the zero rate of VAT’ (Dáil Eireann: 28th November 2018).
This is untrue. Following a commitment given by the Chairman of the Revenue Commissioners to the Oireachtas Finance Committee on 24th January 2019, Revenue have just published a previously classified VAT policy expert report which says ‘in conclusion, the results from this questionnaire show that in a wider sense invited food experts in Ireland deem food supplements as food’.
- ‘Consistent challenges to Revenue guidance and decisions on the VAT rating of products gave rise to serious concerns about compliance within the industry and unfair competition between compliant and non-compliant businesses’. (Dáil Eireann: 22nd January 2019)
This is untrue. The industry has applied the Zero VAT rate, consistent with established Revenue practice and guidelines. Since Revenue themselves had published that food supplements such as Royal Jelly Capsules and Ginseng Tablets were correctly Zero-rated, it followed that most other food supplements would also be Zero-rated.
The Minister for Finance had previously stated on the 11th October 2018 that ‘there remains uncertainty as to which food supplements qualify for the zero rate or not’ and that ‘before agreeing to any legislative change in this area, all consequences must be fully considered’.
The Revenue Commissioners have now denied Irish consumers the opportunity to have this issue fully considered and resolved by new legislation. Instead, they misled the Minister and his Department, in order to introduce a punitive tax on 1st March 2019, which is both unwarranted and unnecessary.
These products have brought comfort to our whole family
“I am the mother of a special needs son who has been sick since he was four years old. I cannot say enough about how much he has improved since taking probiotics, omega 3 and vitamin D. These supplements have given my son a completely new lease of life. The improvement is massive, really tremendous. It has been years since I have had the comfort of knowing he can go out without needing a change of clothes in case of accidents. Probiotics have made it possible for him to go out on day trips without having to worry about this. He recently went to the cinema with his new carer with no problems, without these probiotics this would not have been possible. These products have brought comfort to our whole family. I do not work and struggle to afford these products, it would be a disaster for my son if these products were to be increased in price due to Vat being applied at 23% as I would most certainly not be able to afford them.”
Stephanie, Co. Mayo
This will cancel my pension increase
“I am in my 70’s but I want to stay in good health for as long as possible. I do have osteoporosis which means I have to stay active and keep my joints moving. I have been taking a plant based omega 3 supplement for around 6 years now. I also take microbiotics and other supplements to boost my immune system. Having to pay VAT on food supplements would cost me around €250 extra annually – or to put it another way €5 weekly which would cancel out the increase to the old age pension in this year’s budget!”
Kathleen, Co. Wicklow
I would consider supplements to be a vital part of how I look after my health
” In April of 2016 I had a serious fall from a ladder and broke my left hip and wrist . As my wife and myself would tend to regularly use supplements to maintain the health of ourselves and our children I wanted to incorporate some of these items into my recovery as I felt that it would be more effective if I could do this.
Therefore following the setting of the fractures etc I brought several items in to the hospital and checked with the consultants and nursing staff that it was ok for to use them in conjunction with the medications that I had been recommended . There would have been products such as vitamin D, vitamin C glucosamine and probiotics. I was given an enthusiastic all clear to continue using these items during that lengthy process and I made an excellent recovery and was able to return to my job as a roofer . .
I continue to use supplements in order to help my system cope with a heavy workload and find that if I discontinue them for any length of time more than 2 weeks that I see a huge deterioration in my ability to work and therefore I am certain that they are a valuable addition to allowing me to be an effective parent and provider for my family.”
Oliver, Co. Wexford
I am surprised that such a move would be even considered by the Government
“My husband and myself run a farm which as everyone knows is quite a demanding occupation and in order for to avoid illness or becoming run down I try to support our health with a variety of food supplements.
These items would include such products as probiotics, multivitamins and also some specialist items such as boron and coenzyme Q10 and a closely related product called pqq.
Earlier this year one of my son’s was diagnosed with a mitochondrial disorder which affects the strength of his muscles I had to do quite a lot of research as it is a rare condition and very little is known about it and as such there is no specific treatment . Following my research I to use the Q10 and pqq supplements with him as they seem to be the most obvious choices to support him in his effort to regain his full strength. I would find it a huge additional burden on my normal budget if there were an extra tax added to what is often a considerable spend on these products and would be surprised that such a move would be even considered by the government.”
Margaret, Co. Wexford
I wouldn’t be able to afford what I need to stay well
“Health food and natural supplements have been part of my first aidkit, my diet, my go-to support for years. I use a range of excellent supplements to support my wellbeing and they work. I can’t remember the last time I visited a GP for an illness. The fact that I rarely miss a day of work is because I look after my health through diet, exercise, yoga, meditation & supplements. they are, to me as essential as the food I eat. Having to add 23% tax onto that purchase would impact my well being hugely. I wouldn’t be able to afford what I need to stay well. It’s that simple.”
Ruth, Co. Waterford
What else can I do?
Email the Minister
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