Ireland
The 9% VAT rate, and what to do about it.
Food and catering dropped from 13.5% to 9% on 1 July 2026. Drink did not. That split is where most tills are now wrong.
In short
From 1 July 2026 the VAT rate on restaurant and catering services in Ireland fell from 13.5% to 9%, including hot takeaway food. It is legislated to run to 31 December 2030. Alcohol, bottled water, soft drinks, sports drinks and vegetable juices are excluded and remain at the 23% standard rate even when served as part of a meal. Holiday accommodation stays at 13.5%.
Updated 28 August 2026
What actually changed on 1 July 2026
The rate on restaurant and catering services, including hot takeaway food, moved from 13.5% to 9%. It was announced in Budget 2026 in October 2025 and took effect on 1 July 2026. Unlike the pandemic-era reductions, this one is legislated to run until the end of 2030, so it is worth setting up properly rather than treating it as temporary.
- Restaurant and catering services: 13.5% to 9%
- Hot takeaway food: included in the reduction
- Hairdressing: also included, for what it is worth to you
- Runs to 31 December 2030
What did not change, and this is the part that trips people up
Drink was carved out. Alcohol, bottled water, soft drinks, sports drinks and vegetable juices stay at the 23% standard rate, and crucially they stay at 23% even when they are supplied as part of a catering service. So a meal deal with a soft drink in it is not one VAT rate. It is 9% on the food element and 23% on the drink, and it has to be apportioned.
- Alcohol: 23%
- Bottled water, soft drinks, sports drinks, vegetable juices: 23%
- Still 23% inside a meal or a bundle
- Holiday accommodation: unchanged at 13.5%
The meal deal problem
If you sell a burger, chips and a drink for one price, that single price now spans two VAT rates. Revenue expects a reasonable apportionment between the 9% food element and the 23% drink element. Plenty of tills handle a bundle as a single line at a single rate, which is now wrong, and the error compounds quietly on every deal you sell. If you run combos, this is the first thing to check.
Setting it up on the till
VAT should be set per item and per order type, not as a single rate on the system. Per item, because your drinks and your food differ. Per order type, because eat-in and takeaway have historically diverged and could again. If your system only supports one rate, or needs a support ticket to change it, that is a real operational cost every time policy moves, and Irish hospitality VAT has now moved several times in a few years.
- Rate set per item, so drinks are not swept in with food
- Rate set per order type, for eat-in versus takeaway
- Bundles apportioned across their components
- Changeable by you, in minutes, without a support call
Should you pass it on or keep it?
That is a commercial decision and the honest answer is that most operators kept most of it, because input costs had risen ahead of the cut. There is no obligation to reduce prices. What is worth doing is deciding deliberately rather than by accident: check what the change did to your gross margin per dish, and if you are holding prices, know that you are and why. The one thing to avoid is discovering six months later that your prices moved because a system defaulted somewhere.
Questions, answered straight.
Not covered here? Just ask us.
Does the 9% rate apply to hot takeaway food?
Yes. Hot takeaway food is included in the reduction alongside restaurant and catering services.
What rate applies to a soft drink sold with a meal?
23%. Soft drinks, bottled water, sports drinks and vegetable juices were specifically excluded and remain at the standard rate even when supplied as part of a catering service.
How long does the 9% rate last?
It is legislated to apply until 31 December 2030. That is longer than the previous temporary reductions, though a future budget can always revisit it.
Do I have to lower my prices?
No. There is no requirement to pass the reduction on. Most operators retained some or all of it against cost increases elsewhere. Decide deliberately and check the margin effect per dish.
What about cold takeaway food?
Cold takeaway food has its own treatment and a number of items are zero-rated, which is unchanged by this reduction. If you sell a mix of hot and cold, check the categories individually rather than assuming one rate covers the counter.
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