The IBEC subsidiary organisation, which represents companies in the information, communications and technology sectors, says our VAT rate of
21 per cent is damaging e-commerce and Ireland’s online competitiveness.
Brendan Butler, ICT Ireland’s director, is calling for Irish VAT rates to be reduced to 17.5 per cent to match the VAT rates currently in operation in the UK.
According to OECD predictions, the worldwide Internet shopping market will grow to EUR420 billion by next year, but Butler claims that Irish firms will reap only a tiny proportion of this growing market because of our ‘punitive’ VAT rate.
At present Ireland has one of Europe’s highest VAT rate, while Luxembourg has the lowest,15 per cent. In Germany and Spain, VAT is at 16 per cent, in Portugal it is 17 per cent), in the Netherlands it is 19 per cent and in France it is 19.6 per cent).
ICT Ireland claim that, in the absence of harmonised VAT rates for e-commerce, those EU countries with the lowest VAT rates have a major competitive advantage when it comes to Internet shopping.
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