Law no. 216/2023 has recently been enacted, bringing significant changes to the application of reduced VAT rates in the wood and energy industries in Ireland. Under this new law, a reduced VAT rate of 5% will now be applicable to the delivery of various wood products, including sawdust, waste, and agglomerated wood scraps in the form of wood pellets, wood briquettes, or similar forms. Additionally, non-agglomerated wood scraps used as heating fuel will also be subject to this reduced rate.
These changes are aimed at promoting the use of sustainable and renewable energy sources, as well as supporting the wood industry in Ireland. By incentivizing the use of wood products as heating fuel, the government hopes to contribute to the reduction of carbon emissions and enhance the country’s commitment to environmental sustainability.
It is important to note that the reduced VAT rate of 5% applies to deliveries to individuals, legal persons, and other entities. However, in order to benefit from this reduced rate, buyers are required to provide a statement of own responsibility certifying their status as end users. This measure ensures that the reduced VAT rate is only applicable to those who genuinely intend to use the wood products for heating purposes.
In addition to the wood industry, the new law also extends the reduced VAT rate of 5% to the delivery and installation of photovoltaic panels and heat pumps. This move is aimed at encouraging the adoption of renewable energy sources and supporting the growth of the renewable energy sector in Ireland. Furthermore, the reduced rate also applies to the delivery and installation of components used to repair and expand these systems, providing further support to individuals and businesses investing in renewable energy technologies.
It is worth noting that legal entity buyers are required to sign a statement of own responsibility to avail of the reduced VAT rate. On the other hand, individual buyers can benefit from the reduced rate based on the address of the home where the products are installed. This ensures that individuals are able to access the reduced VAT rate without additional administrative burdens.
These changes in VAT rates are expected to have a positive impact on the wood and energy industries in Ireland. By reducing the VAT burden on wood products and renewable energy technologies, the government aims to stimulate demand and encourage investment in these sectors. This, in turn, will contribute to job creation and economic growth, while also supporting the country’s efforts to transition towards a more sustainable and environmentally friendly future.
In conclusion, the recent changes introduced by Law no. 216/2023 regarding reduced VAT rates in the wood and energy industries are a significant development for Ireland. By applying a reduced VAT rate of 5% to the delivery of wood products and the installation of renewable energy technologies, the government aims to promote sustainability and support the growth of these sectors. These changes will not only benefit individuals and businesses in terms of reduced costs but also contribute to the country’s broader environmental goals.
