9% VAT Rate Returns for Hospitality: What Your Business Needs to Know Before July 2026

Good news is coming for Ireland's hospitality and tourism sector. From 1 July 2026, the 9% VAT rate returns — and if your business is in hotels, restaurants, tourism or related services, now is the time to get ready.

Why This Matters

The reduced 9% VAT rate was a lifeline for the hospitality sector during difficult years, and its return has been welcomed across the industry. Introduced through the Finance Act 2025, the change brings significant relief for businesses that have been operating at 13.5% since the temporary rate ended. Revenue have now issued updated guidance ahead of the 1 July 2026 changeover, giving businesses time to prepare properly.

Who Benefits from the 9% Rate?

From 1 July 2026, the 9% rate will apply to a wide range of hospitality and tourism businesses, including:

Hotels, guesthouses, B&Bs and holiday accommodation

Restaurants, cafés, catering and hot takeaway food

Tourism attractions, cultural admissions and guided tours

Events, cinemas, theatres and certain leisure activities

Hairdressing and some personal services

Newspapers and qualifying printed matter

If your business falls into any of these categories, you're looking at a meaningful reduction in your VAT liability from the start of Q3 2026.

What's Not Changing?

Not everything moves to 9%. The following sectors remain at 13.5%:

Construction services and building materials 

Heating fuels

Cleaning and veterinary services

Most professional and property-related services

The standard 23% rate and the 0% rate also remain unchanged. 

What Should Your Business Do Now?

A VAT rate change sounds straightforward, but the practical implications touch almost every part of your operations. Here's what to tackle before 1 July:

1. Update your systems

Your POS system, online ordering platform, invoicing software and accounting package all need to reflect the new rate from day one. Don't leave this until the last week of June — test everything in advance.

2. Review your pricing and materials

Menus, price lists, brochures and website pricing may all need updating. Decide in advance whether you're passing the saving on to customers, absorbing it to improve margins, or a mix of both. Either way, your marketing materials should be consistent and accurate.

3. Handle advance bookings and deposits carefully

This is where businesses can easily get caught out. If a customer pays a deposit before 1 July 2026 for a stay or event after that date, the VAT treatment needs careful consideration. The rate that applies will depend on the tax point 

4. Watch out for mixed-rate supplies

Many hospitality businesses supply a combination of goods and services that attract different VAT rates. A hotel offering accommodation, food and spa services, for example, may have multiple rates applying at once. Make sure your systems can correctly separate and account for each. 

The Bottom Line

The return of the 9% VAT rate is a genuine positive for the hospitality and tourism sector, but it does require preparation. Businesses that get their systems, pricing and accounting in order now will be well placed to benefit from the change without any compliance headaches.

If you're unsure how the VAT rate change will affect your business, or if you'd like assistance reviewing your VAT returns and pricing structure ahead of July, our team at Ledgerplus Accountants is here to help. We work with hospitality and tourism businesses across Cork and beyond and can make sure you're ready for the changeover.

To speak with one of our accountants, call us on 021 242 7576 or email info@ledgerplus.ie.