General place of supply rules for services

Updated on April 21, 2022

Overview

Value-added tax (VAT) laws for service supplies are outlined in this section.

Defining a service for VAT

basic norms for the providing of services in general

Services that are exempt from the standard regulations about where they should be provided

Customers in other countries may be subject to Irish traders’ VAT responsibilities.

What is a service for VAT purposes?

For VAT purposes, a service is any economic activity that is not a supplier of commodities, such as a consulting firm.

Among the most common services:

services provided by caterers, plumbers, accountants, lawyers, and consultants the granting and surrendering of a right the hiring (other than hire-purchase) or leasing of things electronically supplied
The return of moveable items, created from materials supplied by a customer, after processing.

Consumers and businesses have different requirements when it comes to the source of their supplies. Exceptions to these general norms, as well as rules governing how to use and appreciate the resource, may override them.

Supply of services to a business (B2B)

Business-to-business services are provided at a company’s location. This is known as the place of supply (PoS). No matter if they are located in the European Union or not, this applies.

services can be provided to a business customer at any of the following locations:

where he or she has established their business where that person’s fixed establishment is located or in the absence of such place of business or a fixed establishment, the place where he or she has a permanent address or usual place of residence.
On services provided outside of Ireland, the Irish supplier often does not charge VAT. When it comes to VAT, the business customer will take care of the paperwork in their own state.

A service is provided by XYZ Ltd, an Irish corporation, to B Ltd. B Ltd was founded in France and does not have a permanent location outside of the country.

B Ltd’s headquarters are located in France, which serves as the source of supply. XYZ Ltd does not levy VAT in the Republic of Ireland. When B Ltd files its own VAT return, it is responsible for the French VAT. This supply is exempt from Irish VAT.

Example 2 and Example 3 are both examples

Supply of services to a non-business consumer (B2C)

The supplier’s location is the point of supply for services provided to businesses and consumers (B2C).

fixed establishment or, in the absence of such place of business, the place where the person has a regular place of residence or a permanent address.
If the customer is outside the European Union, there are some services where the supplier location is outside Ireland.

As an illustration, consider Case 4.

Summary of the place of supply services rules

A summary of the place of supply of services rules is set out in the table below (subject to certain exceptions or use and enjoyment rules).

 Summary of the place of supply of services rules
Country of establishment of supplier Country in which customer established Status of customer Place of supply Person liable to account
for Irish VAT
Ireland Ireland Business or Private Ireland Supplier
Ireland Other EU State Business Other EU State No Irish VAT
Ireland Other EU State Private Ireland Supplier
Ireland Outside EU Business Outside EU No Irish VAT
Ireland Outside EU Private Depends on nature of the Service Supplier (if VAT occurs)
Other EU State Ireland Business Ireland Business customer
Other EU State Ireland Private Other EU State No Irish VAT
Outside EU Ireland Business Ireland Business customer
Outside EU Ireland Private Depends on nature of the Service Depends on nature of the service – if taxable in the State – the supplier

Exceptions to the general place of supply rules

There are exceptions to the general place of supply rules that link the place of supply to where the service is carried out.

If the reverse charge arrangement does not apply, the supplier must register and account for VAT in the EU Member State of supply.

The VAT One Stop Shop (OSS) scheme will be available to all firms that sell these services to consumers (B2C) in the EU beginning on July 1, 2021.

The following table summarises the exceptions to the basic rule about where services should be provided.

Summary of the exceptions to the general place of supply rules for services
Type of Service Place of supply rule
Supply of services connected with immovable goods Place of supply is where the goods are located. Where the service provider is outside Ireland and the work is carried out in Ireland, VAT is accounted for by the Irish business recipient on a reverse charge basis.
Passenger transport services (B2B and B2C) Place of supply is where the passenger transport takes place.
Transport of goods (B2C) Place of supply is the place or the places where the transport takes place.
Intra-Community transport of goods (B2C) Place of supply is the place of departure.
Intra-Community transport of goods (B2B) Place of supply is the place where the customer is established.
Cultural, artistic, sporting, scientific, educational and entertainment or similar services supplied (B2B) In the case of admissions to an event, the place of supply is the place where the event actually takes place.
Cultural, artistic, sporting, scientific, educational and entertainment or similar services supplied (B2C) In the case of B2C supplies of services and ancillary services in relation to an event, the general rule does not apply and the place of supply of the services is where the event takes place.
Ancillary transport services, valuations, work on movable property supplied (B2B) General rule with reverse charge applies.
Ancillary transport services, valuations of movable goods, work on movable property supplied and contract work (B2C) Place of supply is where the services are physically carried out.
Restaurant and catering services, generally. Place of supply is where those services are physically carried out.
Restaurant and catering services for consumption on board ships, planes and trains while within the community. Place of supply is the first scheduled point of departure of the ship, plane or train (e.g. the State if the first point of departure is the state).
Hiring out of means of transport (short-term) For short-term hiring out of means of transport, the place of supply is where the transport is put at the disposal of the customer.
Hiring out of means of transport long-term (B2C) The place of supply is where that customer is established or has a permanent address or usually resides. However, see below for long term hire of pleasure boats.
Hiring out a pleasure boat long-term (B2C) The place where the supplier puts the boat at the customer’s disposal provided that the supplier’s place of business or fixed establishment is in that place.
Telecommunications, broadcasting or electronically supplied services (TBE services). (B2C), provided by non-EU based suppliers The place of supply is where the customer is established or has a permanent address or usually resides; provided that the TBE service is not connected with immovable goods.
Telecommunications, broadcasting or electronically supplied services (TBE services), (B2C), provided by EU based suppliers Subject to the B2C €10,000 threshold, the place of supply is where the supplier is established, has a fixed establishment or permanent or usual address. The supplier has an option to have the place of supply treated as in the row above.
Certain specified services to customers outside the EU (B2C) The place where the customer is established, has a permanent address or usually resides.
Intermediary services (B2C) The place where the underlying transaction is supplied.

 

VAT obligations of Irish traders when supplying services abroad

It is imperative that you verify the customer’s status as either a business or a private individual while providing services outside of your country of residence. You’ll be on the hook for VAT if you don’t charge it because you identified your customer improperly. In the event of a Revenue audit, you may also be subject to interest and penalties.

Identification of a business customer

You must comply with the following rules if you are providing services to a business customer in another EU Member State:

verify the legitimacy of the company customer’s VAT number by obtaining it
invoice with a note noting that a reverse charge will be applied and include the customer’s VAT number
In the event that a VAT number is not yet available for a new business customer, request a letter from the tax authorities.
the other Member State’s VAT Information Exchange System (VIES) determines whether or not the supply is exempt in that Member State. If it’s taxable, then include it on the VIES return.
A VIES statement will be required to show the exact VAT number of the new business and details of the services provided.
Returning to the original text.
VIMA can be contacted to validate an EU VAT number on the EU Commission’s website.

Verifying the status of your customer

It is assumed that you have acted in good faith when you confirm the status of your customer. You must first determine whether or not the consumer is a taxable individual in order to proceed.

This must be accomplished by:

Finding out if the customer is a taxable or non-taxable legal entity for VAT purposes by verifying their VAT number and/or other verification.

Supplies to business customers outside the EU (B2B)

VAT does not apply to services provided to businesses outside the EU. That being said, you’ll need to gather enough information and documentation to show that the consumer is eligible for tax deductions.

The following items must be obtained:

Proof that the customer is based outside of the European Union.
Taxpayer identification number. Taxpayer identification information from your consumer is one example of this type of evidence.
It is possible to include the following as additional proof of the VAT number:

A printout of the client’s website, which shows that the customer is engaged in an economic activity, is required to prove that the customer is a taxable person.

Supplies to non-business customers outside the EU (B2C)

Certain B2C (business-to-consumer) supplies are exempt from VAT outside the EU. If the customer is outside the European Union, you’ll need to give proof of that fact (EU). It is your responsibility to make sure the information provided by the consumer is accurate. Checking the address connected with a credit card number can be done through pre-authorization.