Deputy Pádraig O’Sullivan Question:
- Deputy Pádraig O’Sullivan asked the Minister for Finance if consideration will be given to applying a 0% VAT rate to gluten-free food products to bring into line with other medicinal products; and if he will make a statement on the matter. [8979/25]
Minister For Finance – Pascal Donohue
The VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply. In general, the Directive provides that all goods and services are liable to VAT at the standard rate unless they fall within the categories of goods and services listed in Annex III, in respect of which Member States may apply a lower rate.
On this basis, Ireland applies the zero rate to food products, for example, bread, butter, cereals, meat, milk, and fruit/vegetables (fresh or frozen). Foods for special medical purposes for use under medical supervision to manage specific medical conditions, diseases, or disorders are also zero rated. However, certain foods are specifically excluded from the zero rate of VAT and are liable to either the reduced VAT rate of 13.5% or the standard rate of 23%, such as biscuits, cakes, savoury snacks, and confectionary products. Gluten free products are treated the same way as their non-gluten equivalents: for example, gluten-free bread is zero-rated in the same way as bread, and gluten-free cakes or biscuits are subject to VAT in the same way as cakes and biscuits.
EU law provides that reduced rates of VAT can be selective and restricted to “concrete and specific aspects” of a category in Annex III, provided it does not infringe on the principle of fiscal neutrality. This principal requires that similar products are treated in the same manner for VAT purposes. As such, similar products cannot be rated differently, for example, a ‘biscuit’ versus a ‘gluten free biscuit’. Therefore, if a particular rate is applied, whether it is standard or reduced, it must be applied to all ‘biscuit’ products. As such, any VAT rate reduction given to gluten free food products such as gluten free biscuits, cakes, savoury products, and confectionary would also have to apply to their non-gluten equivalents
