Revenue eBrief No. 001/25

02 January 2025

VAT Treatment of heat pump heating systems

Following Finance Act 2024, a new Tax and Duty Manual (TDM) has been published to provide guidance on the VAT Treatment of heat pump heating systems. 

The following Tax and Duty Manuals have been updated to reflect amendments made by Finance Act 2024:

• VAT Treatment of Food and Drink Supplied by Wholesalers and Retailers TDM is amended to clarify that the standard rate of VAT applies to juice extracted from, and other drinkable products derived from, fruit, vegetables, plants, grains, seeds, or pulses and, that milk substitute drinks derived from plants will continue to be subject to the zero rate of VAT.
• Management of special investment funds TDM is amended to provide clarity that the management of an Irish AIF managed by an Irish AIFM is covered by the fund management exemption. It also ensures that the exemption applies to the management of an Irish AIF managed by a non-Irish AIFM including where the AIFM is registered with a competent authority of a Member State.
• VAT treatment of the Special Flat-rate scheme for Farmers TDM is amended to include the new flat rate addition rate of 5.1%.
• Construction services TDM includes a consequential amendment arising from the application of second reduced rate to the supply and installation of low emissions heat pump heating systems.