Government urged to extend zero VAT rate on PPE to businesses

The Government is effectively profiting from the maintenance of public health by charging businesses VAT on the purchase of personal protective equipment (PPE), the Irish Small Medium Enterprise association (Isme) has claimed.

But the Department of Finance insists a VAT exemption on PPE purchases already applies to State operators, hospitals, GPs and care homes as per an EU-wide decision in April and that it is prohibited from extending this exemption further by EU law.

Nonetheless Isme chief executive Neil McDonnell said the Government’s failure to extend the exemption to businesses was heaping further pressure on an already struggling sector.

“The costs of cleaning materials and PPE for Covid-19 will remain a substantial drag on businesses for some time to come, especially those businesses which cannot recover their VAT,” he said.

A zero rate of VAT for purchases of PPE and other equipment used to combat Covid-19 was brought by Revenue in April following a request by Minister for Finance Pascal Donohoe.

It applies only to the Health Service Executive, hospitals and other healthcare settings, including GP practices.


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