The July 2026 VAT rate change: what moved to 9%

Updated: July 2026

On 1 July 2026 the VAT rate on restaurant and catering services and on hairdressing dropped from 13.5% to 9%. The cut was announced in Budget 2026 and Revenue published its guidance ahead of the start date. If you run a café, restaurant, takeaway or salon, your prices, your till and your invoices all changed on the same morning. You can check any figure at either rate with our VAT calculator for Ireland.

What moved to 9%

• Restaurant and catering services: food and non-alcoholic drinks served in restaurants, cafés and pubs, plus hot takeaway food and catering supplied for events.
• Hairdressing services: cuts, colours and styling. Beauty treatments that are not hairdressing were not included in the change.

What did not change

• Alcohol, soft drinks and bottled water stay at 23%, even when they are served with a 9% meal. A dinner bill can carry two rates.
• Hotel and short-term guest accommodation stays at 13.5%. The cut applies to the restaurant downstairs, not the rooms upstairs.
• Everything already at 9%, such as gas, electricity and sporting facilities, simply stays where it was.

Worked example

A lunch main priced at €16.50 gross before July carried 13.5% VAT: the net was €14.54 and the VAT €1.96. Keep the same gross price at 9% and the net becomes €15.14 with €1.36 of VAT. The €0.60 difference per plate is margin you keep, or room to cut the menu price. Run your own menu through the calculator at both rates to decide which way to go.

Checklist for traders

• Update till and POS tax codes so sales from 1 July post at 9%.
• The rate follows the time of supply. A meal served on 30 June is 13.5% even if invoiced in July.
• Credit notes for pre-July sales must use the original 13.5% rate.
• Split bills correctly: food at 9%, the wine at 23%, on the same receipt.
• Your first VAT3 return covering July and August will mix rates across the period if you had June transactions still settling.