VAT zero-rating of Covid-19 Testing Kits
The price of antigen tests had risen dramatically since the start of this year after VAT was charged at 23% on the tests. This followed the ending of a European Commission derogation introduced during the pandemic.
However, following extensive discussions between Revenue and Finance Minister McGrath in January it was agreed to return the VAT rate to zero immediately.
The minister said the move was important due to the ongoing circulation of this virus and its significant impacts on the healthcare system.
“In my view costs of such testing kits should be kept to a minimum, and this is the context in which I am zero rating VAT on these products with immediate effect,” Minister McGrath said.
Legislation to make this VAT rate permanent is set to go before the Oireachtas soon.
Source: Govt reverses change in VAT rate for Covid test kits (rte.ie)
Following a request from the Minister for Finance, Revenue will permit the application of the zero rate of VAT to the supply of Covid-19 in-vitro diagnostic medical devices (testing kits). The Covid-19 test kits must conform with the essential requirements of all relevant European Medical Device Directives, for example a Covid-19 test kit product which has a CE marking is proof that it meets those requirements.
This temporary measure will apply from 1 January 2023 on an administrative basis pending enactment of the appropriate legislative provisions.
Source: Revenue eBrief No. 015/23
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