How Do I Register for VAT in Ireland?
When starting a company, you may notice that most Irish goods and services have a VAT. It is important to understand how VAT will affect your business and whatever products or services you may provide. This article will explain what VAT is, how it works, who should register for it, how to qualify for it, and if there are any exemptions from it.
What is VAT?
Value-Added Tax (VAT) is applied to any goods or services in Ireland, even ones that are imported into the country. It is charged on the total sum of the merchant’s products, on any services done abroad, and on goods acquired from EU member states. It includes all taxes, commissions, costs, and charges.
What are the Rates of VAT?
The standard rate of VAT is 23% for goods and services that are not in the reduced rate category. The reduced 13.5% VAT is added to goods and services such as fuel, electricity, veterinary fees, cleaning services, building services, and short-term car hires. An even further reduced VAT rate of 9% is applied to tourism-related services and goods, such as restaurants, hotels, and movie theaters. Lastly, there is a 4.5% VAT rate for livestock.
How is VAT Applied to Goods and Services?
Goods are any objects—whether new or used—that include electricity, gas, and power, heat, ventilation or refrigeration. Their place of supply determines whether Irish VAT will be applied or not. These goods will receive VAT:
- Goods that are not dispatched or transported
- Goods that need to be assembled or installed
- Supplies on aircrafts, vessels, and trains
- Electric or natural gas supply
- Distance sales
- Goods that are dispatched or transported
Services that receive VAT are:
- Grant and right surrendering services
- Catering, mechanic, plumbing, accounting, solicitation, and consultation services
- Hiring or leasing goods services
- Electronic services and digitized goods services
- Services that hand-back movable goods after processing them
Who Should Register for VAT?
You must apply for VAT if you are an accountable person who may exceed a VAT threshold, which is based on your turnover. Here is a list of the thresholds:
- €37,000 for service providing
- €37,500 for standard or reduced rate goods suppliers
- €35,000 for mail orders or distance sales
- €41,000 for EU member state acquisitions
- €75,000 for goods suppliers
- €75,000 for goods and service providers that have a 90% turnover from supplies
A non-established person who is a goods/service provider must register for VAT regardless of his/her turnover.Farmers, fishermen, and businesses that stay within these thresholds can elect to apply for VAT.
Who is Exempt from VAT?
Businesses that have goods and services that are exempt from taxation will not be eligible for VAT.
How Can I Register for VAT?
Register for VAT online through the Revenue Online Service (ROS). Your business must be available in Ireland to qualify. You need to complete a TR1 registration form if you are a sole trader, if you have a trust, or if you have a partnership. Fill out the TR2 form if you are a member of a limited company. Registration will be effective after Revenue receives and approves your application.