IAHS: “VAT on health food supplements would be a tax on health.”

Irish 23% health tax hike: Herbals, glucosamine, coQ10, probiotics remain in firing line

By Annie Harrison-Dunn

- Last updated on GMT

Wholesalers will have to fight the case of probiotics, according to the association campaigning against a 23% health supplement tax hike in Ireland.
Wholesalers will have to fight the case of probiotics, according to the association campaigning against a 23% health supplement tax hike in Ireland.
Proposals to push VAT (value-added tax) on some health food supplements and teas to the maximum upper bracket of 23% will discriminate against healthful products, according to The Irish Association of Health Stores (IAHS). 

The association said its lobbying against the proposals had already seen the Irish Finance Minister Michael Noonan waver on his reported plans after making a U-turn”​ last month on herbal teas after consideration of tea versus non-tea sourcing (more below).

However, Jill Bell, spokesperson for the IAHS, told NutraIngredients that other products like herbals, glucosamine, Coenzyme Q10 (coQ10) and probiotics were still very much in the firing line. Vitamins, minerals and certain lipids including fish oil will remain exempt from the point-of-purchase tax.

Discussing the proposals, Bell said: VAT on health food supplements would be a tax on health.”​  

Euromonitor’s Irish analyst, Clemence Martin Saint Leon, told us the proposals lay in a grey zone around health product taxation in Ireland – with products that encouraged the maintenance of normal health at present benefitting from a zero VAT rate, while products taken for muscle growth or weight loss are considered discretionary and subject to 23% VAT. 

This had led to a “fluid”​ situation, whereby manufacturers were reconsidering the claims made on products. 

Taxable claims 

The IAHS said: “The situation regarding sports supplements, particularly protein powders, remains unclear. If they are labelled as muscle building or something similar they will attract VAT, otherwise, with no ‘claims’ they appear to be VAT-free, but the situation is uncertain. Weight loss items will almost certainly attract VAT if labelled as such.​ 

“The situation is ‘fluid’ at the moment where individual manufacturers and suppliers are looking at their products and their labelling and wording with a view to possibly change them. We understand that manufacturers of raw ingredients for bodybuilding products are ‘looking at’ the situation as it unfolds.” 


Bell said there had been a recent example of this situation playing out when Wholefoods Wholesale received two batches of a protein powder, one with no ‘claims’ and one stating that it supported muscle growth. “The latter would have attracted Revenue's attention and possibly the IMB - and was returned to sender.”​   

She added: Claims certainly matter, and EFSA [the European Food Safety Authority] comes into the picture which is pretty complicated.”​ 

Vitamins and minerals supporting the normal functioning of the body will be in the clear, but wholesalers would have to argue the case on probiotics.    

The ins and outs​ 

Herbal teas are being reviewed depending on whether they come from the tea plant or another plant, Saint Leon said. 

Bell said changes in June to this could be proof that campaign and publicity efforts were starting to bear fruit. “Revenue has already done a U-turn on herbal teas, which, until [a few] weeks ago, were definitely to be VAT-ed at 23% - now in the clear and no VAT except for purely fruit infusions.” 

She said since October when the plans were first announced, the Irish finance minister had changed tone and “refused to state explicitly”​ his intentions for the tax levy and which products could expect to be included. 

Taxing health? 

Bell said the tax would come as a blow to Irish consumers she said already had high health service costs to contend with. 

“Making food supplements almost a quarter more expensive than they are makes no sense for people trying to maintain their health and avoid doctors' surgeries.  It’s totally counter-productive to make good health unaffordable.

“Though Minister Noonan stated that the Irish Revenue must follow EU VAT regulations, it seems every member state does its own thing. Currently I think Ireland is the only member state not to have some form of tax on food supplements but we don't shout about that!”​ 

A similar story was seen in the UK last year when an overhaul seeking to address taxing irregularities​ saw all standard whey, creatine and amino acids moved from a 0% tax bracket up to 20%. 

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