Updated on May 19, 2022
What if you don’t understand the VAT? Check to see if you qualify, as not everyone is required to submit an application.
What is Value Added Tax (VAT)?
All goods and services are subject to the value-added tax (VAT), which is levied at each stage of production and delivery. VAT is typically included in the price of the goods or services we purchase as consumers.
Once you have registered for VAT in Ireland, you must charge VAT on all of the goods and services you offer. In addition to reporting and paying your tax obligations, you must also account for VAT in your VAT filings.
There are a lot of variables to consider when it comes to VAT. When selling products or services, the rules for value-added tax (VAT) varies. In addition, the way VAT is charged in Ireland, the EU, and internationally is governed by a different set of rules. Visit our post on Irish VAT on services for more information.
This tutorial explains the VAT application process and how to obtain an Irish VAT number. If you have any concerns regarding registering for VAT in Ireland, we always suggest that you see an accountant. In order to ensure you have the best possible assistance and guidance for your new business, our Client Services Team is always available to walk you through our services.
When to register for VAT in Ireland?
It’s important to know everything you need to know about the VAT application procedure. Determine whether or not you need a VAT number before registering for one.
You don’t need to register for VAT straight after incorporation, except in certain circumstances
As a general rule, if you start a new firm, you do not have to register for VAT right away. Before you can begin charging VAT on your products or services, your company must first meet a number of requirements.
It’s crucial to know that VAT registration is possible for both sole proprietors and limited companies, and you should get advice from a professional before completing the registration process.
VAT registration is mandatory if you meet any of the following criteria:
If your company sells services or items worth more than €37,500 or €75,000, you must register for VAT in Ireland. Over the course of a year, this is a sales threshold amount (not calendar year)
Acquisitions from other EU Member States over €41,000, or “Intra-Community Acquisitions,” are subject to tax (ICA)
A person who receives services from other countries. You may be required to register for VAT if your firm receives services from outside Ireland and the service is being used in Ireland.
You can choose to voluntary register for VAT
If you do a lot of business with other companies that charge VAT, you may want to register for VAT. The drawback to this is that you must submit VAT returns to Revenue on a bi-monthly basis. For a small business, this could mean significant additional expenses.
If you have any doubts about whether or not you need to register for VAT in Ireland, you may get advice from one of our experts.
Why would I voluntarily register for VAT?
Businesses may register for VAT due of the following reasons:
If you are VAT-registered and have business expenditures, you can claim back the VAT you paid on your purchase.
We usually recommend talking with your accountant about your situation before determining whether or not to register early for VAT. This way, you don’t have to adjust your prices or add VAT later.
What are the VAT rates in Ireland?
Your product or service’s “VAT rate” is the proportion of VAT you will charge for it.
Services in Ireland are subject to a VAT rate of 23% as a general rule, with a few exceptions. The Revenue website has a comprehensive list of current VAT rates.
How to register for VAT?
Obtaining a VAT number in Ireland requires the submission of an application to Revenue. When registering for VAT, Revenue will want to see proof that your business has done business in Ireland.
The evidence you provide Revenue will use to decide whether or not to approve or reject your application.
There is no guarantee that you will acquire a VAT number even if Revenue rejects your application. Your application might be revised at a later date if you need to spend some time obtaining the necessary documentation.
Things to note before you apply for a VAT number
You need proof you require a VAT number
Ireland is where the company does business.
Invoices from Irish vendors and customers have piled up on your desk.
This is where the company’s owner/director lives.
If you have a physical office in Ireland, a virtual office will not be approved as an address.
Reasons why Revenue might reject your application
Ireland isn’t a place where you’re looking to fill positions.
Ireland has no customers.
Your company does not have any business dealings in the Republic of Ireland.
The company’s directors are not Irish.
How long does it take to get a VAT number in Ireland?
Getting your VAT number can take up to 28 working days after Revenue has received your application, and this is without any questions from Revenue.
Before you acquire your VAT number, Revenue may ask you questions about your business or require you to provide extra information. They’ll normally give you 30 days to respond, but it’s imperative that you respond to them as quickly as possible.
How to charge VAT?
VAT charging procedures are governed by a variety of laws. What you are selling, who you’re selling it to, and where it’s being sold all have a role in how VAT is charged by your business. This page contains comprehensive information on how VAT is charged in Ireland, the EU, and abroad.
What kind of business do you run? Contact us immediately if you’d like to outsource your VAT duties to a professional because there are varying VAT regulations for different situations.
What are VAT returns?
On your VAT return, you’ll find all the invoices that were billed and all the invoices that were billed and claimed for VAT.
Once a taxable period has ended, VAT3 returns must be filed by the 19th of the subsequent month or by the 23rd of the subsequent month if they are submitted through ROS (Revenue Online Service).
January 1st marks the beginning of the two-month taxable period (bi-monthly).
Returns for VAT period 1 (1st January – 28th February) must be submitted by the 19th of March, or by the 23rd of March if they are submitted electronically through the Revenue Online System (ROS).
You may be subject to fines and penalties if you fail to file your VAT returns or if you under-declare your VAT.
How do I cancel VAT registration?
As soon as you decide to terminate your VAT registration with the Irish Revenue Commissioners, be sure to let them know right away. Cancellation of your VAT registration is possible if:
You’ve stopped trading, your revenue has dropped below the relevant turnover threshold, an incorrect VAT registration has been submitted, or the nature of your firm has changed so that you no longer make taxable supplies. All of these things have happened to you.
What if I elected to register for VAT?
Even if your business does not meet the VAT threshold, you have the option to register for VAT, as previously discussed. Notifying the Revenue Commission is the only way to terminate your VAT registration.
Cancelling your VAT registration may result in tax liabilities; keep this in mind when making this decision. You must reimburse Revenue for any VAT refunds you received throughout the tax year. There is no limit on the amount of VAT refunds that can be claimed prior to cancelling your VAT registration.
Return forms and demands for estimated VAT liabilities will continue to be issued automatically if you do not notify your Revenue office.
What do I need to do next?
Are you a freshly formed company in need of registering for tax purposes? For new Limited Companies, we offer a special Startup Offer of €175+VAT per month for 18 months for accountancy services.
Contact us at +353 (0) 1905 9364 or [email protected] If you have any queries regarding starting a business in Ireland or registering for taxes, we’re here to help.