Editorial Team – [2026] 186 taxmann.com 279 (Article)
Global IDT Insights provides a weekly snippet of tax news specifically related to Indirect Taxes from around the globe.
1. Ireland Updates Guidance on VAT Treatment for Guest/Holiday Accommodation
Ireland has updated its VAT Tax and Duty Manual relating to guest or holiday accommodation. The guidance has been revised to incorporate the second reduced VAT rate of 9% applicable to restaurant and catering services with effect from 01-07-2026.
The key aspects of the updated guidance have been described below:
(a) Description of Guest/Hotel Accommodation Services – The provision of guest or holiday accommodation involves the active exploitation of property, along with some additional service element which distinguishes it from the letting of property. Such additional services may include housekeeping, dining facilities, reception services, etc.
(b) Establishments Providing Guests or Hotel Accommodation Services – All establishments providing guests with accommodation are supplying guest or holiday accommodation. Such establishments include:
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- Hotels
- Guesthouses
- Serviced apartments
- B&Bs
- Aparthotels
- Web-based guest and holiday accommodation, and
- The letting of a place in a caravan park, campsite or glamping site
(c) Exclusion of Emergency Accommodation – The guidance clarifies that emergency accommodation does not fall within the concept of guest or holiday accommodation.
(d) Impact of Duration of Stay – The duration of a guest’s stay does not affect the VAT treatment of the accommodation service.
(e) Guest – A “guest” refers to any person availing accommodation for leisure or business purposes. The term is not restricted to tourists or holidaymakers.
(f) VAT Rate Applicable to Guest/Hotel Accommodation Services – Guest and holiday accommodation services are taxable at the reduced VAT rate of 13.5% with effect from 01-01-2026, irrespective of the duration of the stay.
(g) Mixed Supplies of Accommodation and Food – Guest and holiday accommodation providers often package the supply of accommodation with the supply of restaurant and catering services. While accommodation services are taxable at the reduced VAT rate of 13.5%, restaurant and catering services are taxable at the second reduced VAT rate of 9% with effect from 01-07-2026.
The guidance clarifies that, for VAT purposes, the combined supply of accommodation and meals constitutes a multiple supply.
Accordingly, where a single consolidated charge is levied for a package comprising accommodation and meals, the consideration must be apportioned between the different elements for VAT purposes. The accommodation portion is taxable at 13.5%, while the meal portion is taxable at 9%.
Such apportionment must be carried out on a fair and reasonable basis, taking into account the standalone selling price of each component. The guidance also provides illustrative examples explaining the method of apportionment.
(h) Treatment Where Payment is Made in Advance – Advance payments or part-payments may be received for accommodation packages before a change in VAT rates becomes effective, even though the services are supplied on or after the date of such change.
The guidance clarifies that VAT shall apply based on the rate in force at the time the invoice relating to the payment is issued, or ought to have been issued, whichever is the earlier.
Source – Revenue eBrief No. 086/26
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