Accounting for VAT

Updated on February 8, 2022

Accounting for Value Added Tax (VAT)
Special schemes and the transfer of business assistance are covered in this guide.

When is VAT due?

When goods and services are sold, Value-Added Tax (VAT) is imposed.

where an invoice isn’t necessary, VAT is due at the time of purchase

whether or whether payment has been received in advance of the supply or when it was made.
On this date, the VAT rate is:

the date on which the supply is made available, or the date on which an advance payment is made.
Where an invoice is necessary, VAT is due on the earliest of:

date of invoice issuance or, if not yet mailed, the deadline by which it should have been sent.
The VAT rate is the current rate:

The date the invoice is issued, or the date you should have issued the invoice.
Revenue has information on when you must submit your VAT payment. Sections on when VAT is due and how to account for it on money received are included in this guide.

A few exceptions to VAT are listed here:

On intra-Community acquisitions, VAT is often due on the date of the invoice. Nevertheless, VAT must be paid no later than the fifteenth (15th) day of the next month after the month in which the goods arrive.
Purchases of new motor vehicles made within the EU by anyone other than those eligible for VAT deductions are subject to VAT. In most cases, it is due at the time of registering a vehicle (VRT). The 15th day of the month following the ICA is the date on which VAT must be paid if no VRT has been paid.
When a utility firm sends a bill to a consumer for services such as gas, electricity, or telecommunications, VAT is required. Providing the utility company bills at least once every three months, this is possible. The rate that will be applied to the customer’s bill is the rate that was in effect at the time the bill was issued. This holds true even if the buyers have paid in advance.
Except for those who are eligible to a VAT deduction, ICAs of new aircraft and watercraft are subject to VAT. Upon arrival, you must submit it within three days. Taxes on goods and services are paid to the local Customs and Excise Department’s Collector.
At the time of entry into the State, items imported from non-EU nations are subject to VAT.
ICA’s of excisable goods are subject to VAT based on the date on which the excise tax is due and payable. Alcohol products have their own set of rules and regulations.
When a duty suspension arrangement expires, VAT is due on the items that were brought into the country.
If you’re using the reverse charge method and have to account for VAT on services you’ve received, you must do so by referring to the earliest of the following dates: the invoice or document issue date, the payment date, or the 15th day of the next month after the service month.

How do you pay VAT?

ROS and myAccount let you pay Value-Added Tax (VAT) in a number of different ways.

Please refer to the Additional Guidance for more information on the requirements for electronic VAT returns and ROS payments.

How to account for VAT

Overview

What you’ll discover is as follows:

How to file a VAT3 return and how to reclaim VAT if it is owed to you.
The deadline for filing and paying VAT is the 19th day of the month after the end of each period. This must be a legal and accurate tax return that was filed to the Collector General via Revenue Online Service (ROS).

If you use the VAT3 return, you can see how much you owe or are entitled to claim for that period of time.

If your VAT refund is repayable, the money will be deposited directly into your bank account. Collector-Generals may withhold reimbursements if you owe tax.

Accounting for VAT on moneys received

Overview

A VAT-registered person’s option to account for VAT based on money received is outlined in this section.

You’ll learn how to apply and the regulations of the system in this section.

For retailers, the VAT guideline special schemes should be read in conjunction with the guidance on special schemes for estimating sales for each VAT rate.

Special schemes for calculating VAT on sales

It is possible to precisely record the sale of goods and services at varying rates of Value Added Tax (VAT) using cash registers or Electronic Point of Sale (EPOS) (VAT). Using these records, you can file your VAT return.

What if you cannot accurately record sales at the various VAT rates?

If you don’t have the ability to accurately divide your sales receipts amongst supplies at different VAT rates, there are special programmes available. A business with a high volume of sales and a variety of VAT rates would be a good candidate for this strategy.

Please visit: for further details.

Transfer of Business Relief (TOB)

Taxes are not due on the transfer of business assets to a liable person under TOB. Assets include tangibles like goods and intangibles like goodwill.

It is necessary that the assets transferred be a part of a business that is self-sufficient or a stand-alone business. If a transaction fits this requirement, it is not deemed a supply for the purposes of VAT.

As a prerequisite for obtaining a TOB, you must:

any part of the business that can be operated as a business using the transferred assets, or the full business.
In the extra rules, under the heading “Transfer of Business Relief,” you’ll find more in-depth details.

Pharmacists’ Scheme for VAT

If your yearly sales is less than €1.5 million, you are eligible for the Pharmacists’ Scheme for VAT.

It was designed to alleviate pharmacy-related operational concerns. Revenue and the Irish Pharmacy Union (IPU) discussed a revised Pharmacists Scheme for VAT in light of these concerns. It is easier to understand how pharmacies work under the new system.

 

Information on the Pharmacists’ Scheme for VAT can be found under additional instructions.