Find a Cheaper Electricity Provider and Save Money in 2025!
Call our Selectra agents today for expert and trusted advice on switching electricity providers and make sure that you are getting the cheapest deal on electricity prices. Figures quoted are only available for direct debit payment and include cashback offers.
Variable Rate
32% Discount
33% Discount
The rate of VAT on electricity in Ireland is currently a temporary 9% rate. This reduced rate was initially introduced on May 1, 2022, and has been extended multiple times, including a recent extension until October 31, 2025. The original VAT rate of 13.5% is due to return on November 1, 2025. Our energy experts here at Selectra can help you find the best deal by calling 📞 (01) 913 1771.
The VAT rate on electricity in Ireland is 9%.
This is a significantly reduced rate that has been put in place by the Irish government as a measure to help households and businesses with the rising cost of energy bills.
The standard VAT rate in Ireland is 23%, while a general reduced rate is 13.5%.
It's important to note that this 9% rate is a "second reduced rate" and has been subject to several extensions. The standard VAT rate in Ireland is 23%, while a general reduced rate is 13.5%.
The decision to maintain the 9% rate for electricity (and gas) has been a direct response to the ongoing energy crisis and efforts to mitigate its impact on consumers and the economy.
The current extension is set to apply until October 31, 2025. Any further extensions beyond this date will be considered as part of the Budget 2026.
Value Added Tax (VAT) is a consumption tax levied on goods and services at each stage of production and distribution, ultimately paid by the end consumer.
In Ireland, it's typically included in the final price of most products and services. However, for utility services like electricity, the VAT amount and rate are often itemised separately on your bill, to make your utility bill easier to understand.
Below you can see where VAT payments are highlighted on a typical domestic electricity bill:
The purpose of VAT is to generate revenue for the government. For consumers, it means that a portion of their electricity bill goes directly to the Exchequer.
For businesses, the rules are more nuanced, with implications for refunds depending on their VAT registration status and the nature of their operations.
What is the Average Electricity Bill in Ireland?
The average electricity bill in Ireland is €1,817.12 for a 24hr urban standard meter
The current 9% VAT rate on electricity is not static. Ireland has seen various VAT rates applied to energy over the years, reflecting economic conditions, government policy, and broader EU directives.
Historically, the supply of electricity has typically been subject to a reduced VAT rate in Ireland, rather than the standard rate.
Prior to the introduction of the 9% rate, the common reduced rate for electricity was 13.5%
The graph belows illustrates the changes to the rate of VAT on electricity in Ireland over the last 5 years:
The temporary reduction to 9% was first introduced on May 1, 2022. This was a direct response to the escalating energy prices driven by global events, particularly the war in Ukraine, and its impact on the cost of living.
The need to alleviate financial pressure on households and businesses, and reducing the VAT on essential utilities was a means to do so.
This initial reduction was followed by several extensions, pushing the reversion date further into the future, demonstrating the government's commitment to supporting consumers during a period of high energy costs.
For residential customers, the VAT charged on electricity bills is straightforward and is typically included in the total amount you pay.
The 9% rate applies to all components of your electricity bill, including:
This reduced rate provides a direct saving for households compared to what they would pay if the 13.5% or standard 23% rate were applied.
While energy prices have remained elevated, the VAT reduction helps to reduce bills and makes electricity more affordable for families across the country.
The application of VAT on electricity for businesses in Ireland is more intricate and depends largely on their VAT registration status.
The rate of VAT on electricity in Ireland is currently scheduled to increase from 9% to 13.5% from November 1, 2025.
The current reduced VAT rate of 9% on electricity (and gas) was introduced as a temporary measure to help with the cost of living and the energy crisis, and the rate has been extended several times.
However, the most recent extension confirms that the 9% rate will apply until October 31, 2025 After this date, the VAT rate for electricity is currently scheduled to revert to the previous reduced rate of 13.5%.
Any further extensions beyond October 31, 2025, would be considered as part of the normal budgetary process in Ireland.
With the VAT rate on electricity in Ireland scheduled to increase from 9% to 13.5% from November 1, 2025, taking proactive steps to reduce your consumption and manage your bills becomes even more crucial.
Here's how you can prepare and minimise the impact:
Optimise Energy Use:
Talk with Your Supplier:
Explore Support & Upgrades:
Avail of Governement Schemes:
Yes, as a member of the European Union, Ireland is subject to EU VAT Directives, which generally require VAT to be applied to goods and services, including energy supplies like electricity. While Member States have some flexibility in setting rates, the principle of charging VAT on electricity is a requirement.
VAT-registered businesses in Ireland typically reclaim VAT paid on eligible expenses, including electricity, through their regular VAT returns submitted to the Revenue Commissioners. They will offset the VAT paid on their purchases (input VAT) against the VAT they charge on their sales (output VAT). Any net reclaimable amount is refunded by Revenue.
The Public Service Obligation (PSO) Levy is a government-mandated charge added to electricity bills to support renewable energy generation and maintain security of supply in Ireland. The Carbon Tax is a tax applied to fossil fuels, which indirectly impacts electricity generation costs and is passed on to consumers.
VAT is applied to these levies because they are considered part of the overall cost of the electricity supply service, similar to the unit charges and standing charges.
Read More of Our Billing Articles
What is the cost of living in Ireland in 2025?
How long is the cooling-off period in Ireland?
The services and products mentioned on this website may only represent a small selection of the options available to you. Selectra encourages you to carry out your own research and seek advice if necessary before making any decisions. We may receive commission from selected partner providers on sales of some products and/or services mentioned within this website. Our website is free to use, and the commission we receive does not affect our opinion or the information we provide.
Looking for Lower Energy Bills in 2025?
