VAT on Education and Training

Finance Act 2015 Update

With regard to the education amendment in the Finance Act 2015 please note that where an organisation operates vocational training, Revenue has confirmed that the VAT exemption will continue to apply to all vocational training which previously qualified for VAT exemption.   The exemption applies where vocational training or retraining is provided by a body or a private individual.   Revenue guidelines on this Finance Act amendment are due to issue shortly and will be available on their website.

Where someone/corporate/organisation has not previously confirmed with Revenue that their activities qualified for VAT exemption, they can seek clarification by contacting their local Revenue district office.
Training that is aimed at addressing deficiencies in the way an organisation is run, rather than improving the vocational skills of a trainee are liable to the charge of VAT at the standard rate, currently 23%.   It should be noted that business/management consultancy services do not generally qualify as educational or vocational training or retraining and are subject to VAT at the standard rate.
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In order for a course to qualify as vocational training, there are a number of criteria to be satisfied, which are listed in Revenue’s Leaflet on VAT and Educational and Vocational Training and Retraining Services.   An extract from this Leaflet is included below.
Vocational Training or Retraining:

Vocational training is not defined for VAT purposes so it is taken to encompass any training given to a person who can either be an employee or self-employed, in order to improve their ability to carry out their work, or to obtain further employment.   It can be provided in a classroom setting in an institution or on an employer’s premises, on a one to one or group basis.   The trainees must achieve a recognisable standard of skill that will assist them in carrying out their work or duties.

Educational institutions administered by the State or recognised by the State, or private institutions, all provide vocational training or retraining services.
The following guidelines can be used in determining whether a service constitutes vocational training or retraining and would qualify for VAT exemption:

It must be vocational in nature; that is, it must be directed towards an occupation and its associated skills.
It must be primarily given to improve the vocational skills rather than the personal skills of the trainee.
The vocational skills that the trainee acquires can be transferable from one employment to another, or to self-employment.
The training should confer on the trainee a level of skill/ability that can be evaluated by comparison with objective standards.

The training should be provided by means of a structured course, which can be of any duration, and be provided in a classroom setting, to a group or on a one to one basis, or by way of a virtual classroom such as would be the situation with e-learning or distance learning.

There should be a clear trainee/trainer relationship between the trainee and the trainer.
Vocational Training that is not treated as Exempt: Where training or retraining is provided that: does not, in the main fit within the guidelines set out above, or is for personal development, e.g. life coaching, rather than vocational development of the trainee, it cannot qualify for the exemption and is liable for VAT at the standard rate.

For information, the Finance Act can be found at:
http://www.oireachtas.ie/documents/bills28/acts/2015/a5215.pdf

The section that details the education amendment is on page 91.