VAT on oat flat whites and almond lattes will remain unchanged, according to the Department of Finance.
Concern had been raised that VAT on plant-based milk alternatives would increase from 0 per cent to 23 per cent under new measures in the Finance Bill.
Social Democrats TD Jennifer Whitmore said such a change would have been “absolutely ridiculous”, adding that dairy alternatives would be key to meeting climate emissions targets.
She warned that such a change would also disadvantage farmers moving into more sustainable farming mechanisms.
However, a Department of Finance spokesperson said the new measure will not move milk alternatives to the standard rate of tax.
The Department said the change relates to new plant and grain-based beverages.
The spokesperson said: “New plant or grain-based beverage/drink products are increasingly entering the market, as well as powders for the preparation of beverages derived from plants and/or grains.
“Revenue have received technical queries on these products and have confirmed to the submitting taxpayers that such products are subject to VAT at the standard rate.”
The proposed amendment would clarify the VAT Consolidated Acts Value-Added Tax Consolidation Act 2010 (VATCA) by replacing the wording for “fruit or vegetables” with “fruit, vegetables, plants, grains, seeds, or pulses”.
The spokesperson added: “The change would not result in any change in policy nor is it expected to lead to exchequer costs. It is not intended to move milk alternatives to a standard rate.
“They are currently zero-rated and will remain so. This is done on a concessionary basis by Revenue.”
