No review on non-oral contraception VAT

David Lynch | 06 Dec 2018 | 0 Comment(s)

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There are no plans for a review, requested by the Minister for Health, on VAT on non-oral contraception and certain sanitary products for women, the Medical Independent (MI) has learned.

In early October, Minister Simon Harris wrote directly to Minister for Finance Paschal Donohoe requesting the review. In the 1 October letter, seen by MI following a Freedom of Information request, Minister Harris wrote: “While I fully understand that consumer expenditure is widely subject to VAT, there is a strong case for excluding non-oral contraception from this tax.

“I understand also that tampons and sanitary towels are subject to zero per cent VAT. I know that as part of VAT harmonisation agreements reached with the EU in the 1990s, the Irish zero per cent VAT rate on these products was retained.

“The issue that now needs attention is the position with newer products. Newer products (eg, menstrual cups) that were not available at the time of these agreements are subject to the standard rate of VAT.” However, a Department of Finance spokesperson told MI that “VAT is governed by the EU VAT Directive, with which Irish VAT law must comply”.

“While it is possible to apply a reduced VAT rate to non-oral contraceptives, as is the case in Ireland, removing VAT from them altogether is against EU law... Sanitary items like sanitary towels were applied at the zero rate since 1975, while sanitary tampons have applied at the zero rate since 1984.  As both applied at the zero rate since before 1991, it is possible to retain the zero-rated VAT treatment on these products now.

“However, it is not possible to apply the zero rate to other, newer, sanitary products that were not zero-rated on 1 January 1991.

“In this context, there does not seem to be a case for reviewing the VAT treatment of these products.”

However, the spokesperson said a European Commission proposal aiming at flexibility in setting VAT rates would be discussed by members states sometime in the future.

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