What is VAT?

Value Added Tax (VAT) is an indirect tax imposed on products and services in Ireland. As a trader or service provider business, you may be required to collect VAT on Sales and then pay to Revenue on a bi monthly basis.

It is the responsibility of a business to charge, collect and pay VAT liability to Revenue.

When we have to register VAT?

This is a matter of judgment and tax advice is suggested however, revenue has prescribed certain limited as to when business needs to register for VAT.

When you Must register for VAT- Criteria

• When your business or a company sale exceeds by €37,500 for Services and €75,000 for goods in a year time, then the business must register for VAT. in goods, you must register for VAT in Ireland.
• Receiving any outside-of-Ireland services. If you receive services from outside Ireland and use them in Ireland, your company may be required to register for VAT.
• Receiving goods from other EU Member States worth more than €41,000, also defined as intra-community acquisitions (ICA)

What are Ireland’s VAT rates?

The term “VAT rates” refers to the percentage of VAT that you will charge on your product or service.

The standard rate of VAT for services in Ireland is 23%, but there are other percentages to be aware of. On the Revenue website, you can find a complete database of VAT rates

How to register for VAT?

For VAT registration you can use ROS revenue online system or send a form posted or emailed to Revenue for VAT registration.

Revenue assesses your application and may grant a vat number or may refuse the application.

If application for VAT is refused, still business can re apply vat number.

Revenue’s reasons for rejecting your application:

Examples when it can be refused.

• When revenue can’t establish a business is going to run from a place where it is necessary to conduct business from.
• Or it has no customers and founder or employees are not based in Ireland.
• They may ask further questions to understand whether they should grant the VAT number.

You need proof you require a VAT number:

• You’ve got invoices from Irish vendors and clients.
• The Company has trading activity in Ireland
• Owner/director of the company lives here.
• Have Physical office in Ireland, virtual office is not acceptable

What are VAT returns?

For a given time period, a VAT return lists the invoices on which you have charged VAT and the invoices on which you have claimed VAT. 

If you are VAT registered, you must file your VAT3 returns by the 19th of the month following the end of each tax period, or by the 23rd if you file via ROS (Revenue Online Service).

The taxable period is a two-month (bi-monthly) period that begins on January 1st.

How to cancel VAT registration?

You must notify the Irish Revenue Commissioners as soon as possible if you wish to cancel your VAT registration. Your VAT registration may be revoked if one or more of the following conditions are met:

• Trade has ceased to exist.
• Your turnover has dropped below the acceptable threshold.
• Inadvertently, a VAT registration was submitted.
• Your business has evolved to the point where you no longer make taxable supplies.

You have the option of voluntarily registering for VAT

If you do business with a lot of other businesses that charge VAT, you may want to register for VAT. The drawback is that you must submit bi-monthly VAT returns to Revenue. For a small business, this could be a significant additional expense.

Speaking with one of our experts can assist you in determining whether or not you should complete VAT registration in Ireland.

WHAT’S THE NEXT STEP FOR ME TO DO?

Are you a newly formed business in need of tax registration? We have a special offer for new Limited Companies that includes accountancy services for just €130+VAT per month for 18 months.

Call +353 1 442 8230, 00353 851477625 or email moh@tasconsulting.ie to reach out to our Client Services team.