As a business owner in Ireland’s fitness industry, staying informed on VAT rates and registration thresholds is key to managing your tax obligations effectively. This post covers everything you need to know about VAT for gym memberships, fitness classes, one-to-one personal training, and the updated VAT registration thresholds effective from 1 January 2025.
VAT Rates for Gym Memberships, Fitness Classes, and One-to-One Fitness Training
- Gym Memberships
- Current VAT Rate: Gym memberships fall under the provision of facilities for participating in sports and physical activities. This category benefits from Ireland’s second reduced VAT rate of 9%.
- Background: This 9% VAT rate has been in place since July 1, 2011, and was designed to support the tourism, hospitality, and recreational sectors. As of January 2025, this rate remains unchanged, making it favorable for gym owners and members alike.
- Fitness Classes
- Yoga, Pilates, Spinning and Boxercise are considered health and fitness services and are subject to the reduced VAT rate of 13.5%.
- Implications: For instructors and studios offering these classes, this means VAT should be charged at 13.5% on class fees. This applies to both group and individual sessions, ensuring a consistent approach for wellness-oriented fitness services.
- Martial arts and gymnastics classes fall under the standard VAT rate of 23%.
- One-to-One Personal Training Sessions
- VAT Rate: Personal training sessions are subject to VAT depending on the nature of the service provided:
- Recreational or General Fitness Training: If the training is primarily for personal development, general fitness, or recreational purposes, it is subject to 13.5% VAT.
VAT Registration Thresholds for Service-Based Businesses in 2025
VAT registration thresholds determine the annual turnover level at which a business must register for VAT. For service-based businesses, this threshold is critical in managing tax compliance and determining when VAT must be charged on services provided.
Updated Threshold (Effective January 1, 2025)
- Increase in Threshold: Starting January 1, 2025, the VAT registration threshold for the supply of services will increase to €42,500.
- This means that if your business has a turnover exceeding €42,500 over any continuous 12-month period, you are required to register for VAT and apply it to all sales.
Key Takeaways for Fitness Businesses
- Monitor VAT Rates: If you offer gym memberships, fitness classes, or personal training, be mindful of the VAT rates applicable to each service type. Charging the correct VAT rate ensures compliance and avoids potential penalties.
- Assess Training Type for VAT Applicability: For personal trainers, assess whether your sessions may qualify as vocational training to potentially access VAT exemptions.
- Plan for New Registration Thresholds in 2025: Small businesses approaching the new €42,500 threshold turnover mark should prepare and decide if VAT registration is required based on their revenue.
- Consult Revenue if in Doubt: For specific cases, especially concerning the nature of training sessions and VAT exemptions, consulting directly with Revenue or a tax advisor is advisable to ensure compliance and make the most of any tax benefits.
By understanding and applying these VAT rules, fitness and service-based businesses in Ireland can manage their VAT obligations effectively, helping to streamline financial processes and maintain compliance as regulations evolve.
