Value Added Tax (VAT) is a tax on goods and services that is levied by the Irish government. It is charged on the value added at each stage of the production and distribution process and is ultimately borne by the end consumer. VAT in Ireland
applies to all businesses that provide taxable goods and services, regardless of their size or legal structure.
VAT Rates in Ireland
To make it easier for businesses to understand, we've summarized the VAT rates applicable in Ireland below:
• Standard Rate: 23%
• Reduced Rates: 13.5% and 9% (for certain goods and services)
• Zero-rated VAT: applies to exports, certain food and drink items, and children's clothing.
VAT-exempt Goods and Services
Businesses that supply VAT-exempt goods and services are not required to charge VAT, but they are also unable to recover VAT on their purchases. Examples of exempt goods and services include education, healthcare, and financial services.
If your business is providing taxable goods or services in Ireland, it must register for VAT if its turnover exceeds €37,500 for the supply of taxable goods or €75,000 for the supply of taxable services. Once registered, businesses are required to charge VAT on their taxable goods and services, maintain proper records, and submit VAT returns to Revenue on a regular basis.
Understanding the VAT in Ireland registration process should be easier with the key points summarized:
• The VAT registration process can be completed online through Revenue's Online Service (ROS).
• Businesses will need to provide information on their turnover, business activities, and the goods and services they provide.
• A business must register for VAT once it reaches the threshold for VAT registration. It can also voluntarily register for VAT if it is below the threshold.
VAT Returns and Payments
VAT returns must be submitted to Revenue on a bi-monthly or quarterly basis, depending on the turnover of the business. Returns must be filed electronically, and payment must be made at the same time. Late filing or payment can result in penalties and interest charges.
Businesses must keep proper VAT records, including invoices, receipts, and credit notes. These records must be kept for at least six years.
VAT and International Trade
If your business operates internationally, it is important to understand the VAT rules for importing and exporting goods and services. VAT in Ireland may be payable on goods imported into the country from outside the EU, and on certain services received from outside the EU. However, VAT may be recoverable on imports and services received from within the EU under certain conditions.
VAT and Exports
Zero-rated VAT applies to exports of goods and services from Ireland to countries outside the EU. Businesses must keep proper records to prove that the goods or services have been exported.
VAT and Imports
VAT may be payable on goods imported into Ireland from outside the EU. Businesses must register for VAT and pay the VAT due on imported goods. VAT may be recoverable on imports and services received from within the EU under certain conditions.
Summing up Irish VAT
Understanding and complying with the relevant VAT regulations is essential for businesses operating in Ireland. By following the guidelines outlined in this comprehensive guide, you can navigate the complexities of VAT in Ireland and ensure compliance with the regulations. If you have any further questions, please consult with a qualified VAT professional for assistance.