Wanderlust World Wanderlust World Like a sales or income tax that many Americans are familiar with, a VAT is one way in which a government generates income, according to the Citizens Information Board of Ireland, or the CIB. These funds are often spent on social services such as health and education, according to the CIB.
In Ireland, the current VAT rate is 21 percent, as of Jan. 1, 2010, according to the CIB.
Although most goods and services are subject to the 21 percent VAT, there is also a 13.5 percent reduced rate that applies to labor-intensive services, and a 0 percent rate that applies to many medicines, foods and children's clothes, according to Ireland's Office of the Revenue Commissioners.
Financial, medical and educational services are exempt from the VAT in Ireland, according to the CIB. Additionally, musical or theatrical performances during which food and drink are not served are exempt.
According to the European Commission, visitors from outside the European Union--of which Ireland is a member--are entitled to a VAT refund, as long as they leave the European Union with the goods they're requesting a refund on, and as long as they have a refund documentation, which can usually be obtained from merchants. Goods must leave the European Union within three months of purchase, according to the European Commission, and to qualify for a refund of VAT, travelers must have spent a minimum amount that varies from country to country, although in Ireland no minimum applies.