How to register for Two-Tier VAT

Updated on April 18, 2022

An overview of Two-Tier VAT

Customers will have to choose whether they want to register for a ‘domestic-only’ or ‘intra-EU’ VAT registration by June 2019.

Businesses wishing to register for a domestic-only account will benefit from a streamlined registration process under this new method. Missing traders implicated in fraudulent cross-border transactions will be less of a concern.

Intra-EU VAT registration

Apply for ‘intra-EU’ status if you plan to conduct business with companies in other EU member states. Making intra-Community buys will be a lot easier with this. In order to apply for VAT registration, you will need to provide further information. For instance:

sort of client service (private individuals, business, or both)
the EU’s due diligence processes and checks for current and prospective suppliers, as well as an estimate of your annual and quarterly supply of goods/services
In order to apply for a ‘intra-EU’ VAT registration, the applicant must provide evidence of trade or substantial evidence of an intention to trade with other EU Member States. It might be anything from a detailed business plan to a contract or an invoice.
The EU VAT Information Exchange System will immediately register you if your registration is accepted (VIES).

Domestic VAT registration

If you plan to conduct business just within the European Union, you should apply for “domestic only” status. For trade within the country and with nations outside the EU, a simple domestic VAT registration is all that is required. Intra-EU status can be applied for at any time by domestic-only consumers.

Additional information on the new Two-Tier VAT registration process can be found here.

Postponed Accounting

All VAT and Customs and Excise (C&E) registered people who acquire goods from countries outside of the EU VAT area will be able to use Postponed Accounting arrangements starting at 11:00pm on 31 December 2020. Conditions and requirements must be met before something can happen.

More information can be found under the heading “Additional guidance.”

Register online through ROS

Using Revenue Online Service, you or your tax agent can register your business for VAT (ROS). To take advantage of this benefit, you must have a business in the state.

What registration forms should you complete online?

The following paperwork should be completed by applicants who already have a business in the state:

a TR1 registration form for sole proprietorships, partnerships, trusts, and other types of business entities
For limited corporations, use the TR2 registration form.

Can you submit a paper application form?

You or your tax agent will get all paper applications that might have been done electronically. A request to process the application online will be included with the returned application.

Applicants who are unable to use ROS may submit a paper version of the form to their local Revenue office in some cases. The Contact Us page of our website has all of our contact information.

The following paperwork must be submitted in paper form by applicants who do not have a business in the state:

Individuals, single proprietors, partnerships, and trusts should use the TR1(FT) registration form.
Form TR2(FT) for limited liability businesses.
The appropriate form should be sent to the following address:

Registration for Business Taxes Office of Revenue Commissioners P.O. Box 1 Wexford

When will the VAT registration take effect?

After Revenue receives your completed application, your VAT registration becomes effective on a date mutually agreed upon by you and your local tax district.

In order to register, you must do so before the start of your taxable period, which is the day on which you submit your application.

Your Revenue office must be notified within 30 days of any changes to any information you provided.

How do you re-register for VAT?

You can re-register for VAT through Revenue’s eRegistration tool if your registration has been cancelled.

VAT registration necessitates electronic filing and payment of tax returns and payments. For additional information about paying and submitting your taxes electronically, see the section on “Mandatory efiling.”

Postponed accounting

All VAT and Customs and Excise-registered traders have the option of postponing VAT accounting on imports. Certain requirements must be met by the merchants.

Postponed accounting is discussed in greater depth in additional guidelines.

Tax and Duty Manual VAT – Postponed Accounting

VAT – Postponed Accounting
This document should be read in conjunction with section 53A of the Value Added
Tax Consolidation Act 2010 and the Value-Added Tax Regulations 2010 (Regulations
14A) (Amendment) Regulations 20

Tax and Duty Manual VAT – Postponed Accounting
2
Table of Contents
1 Introduction ……………………………………………………………………………………………..3
2 What is Postponed Accounting? ………………………………………………………………….3
3 Postponed Accounting Entries on VAT3 Return……………………………………………..4
4 Postponed Accounting Entries on VAT Return of Trading Details (RTD)…………….4
5 Who can avail of Postponed Accounting?……………………………………………………..5
6 Commencement Date of Postponed Accounting……………………………………………5
7 How long can Postponed Accounting be availed of? ………………………………………5
8 Is it Compulsory to use Postponed Accounting?…………………………………………….6
9 Conditions………………………………………………………………………………………………..6
10 Security Requirement………………………………………………………………………………8
11 Notice of Exclusion ………………………………………………………………………………….9
12 Request to re-instate Postponed Accounting………………………………………………9
13 Appeal………………………………………………………………………………………………….10
Appendix 1 – Notice of Exclusion………………………………………………………………………11

1 Introduction

Those who import goods into the United States are required by law to use Postponed Accounting arrangements.
All imports from third nations, including Great Britain, may be subject to postponed accounting arrangements (UK not including NI).
On December 31, 2020, at 11:59 p.m. (BST), the UK will no longer be a member of the EU’s VAT system, the Customs Union, or the Single Market. Customs and taxation are now applied at the point of importation for third-country trade with Great Britain.
There is no change in the VAT status of products traded between Dublin and Belfast under the Withdrawal Agreement and Protocol on Ireland/Northern Ireland, therefore trade in goods between the two countries will continue as usual. Imports and exports are treated differently for commerce with Great Britain.

2 What is Postponed Accounting?

Imported goods are those that are purchased from outside the European Union by responsible parties. Imports of goods purchased in Great Britain and brought into Ireland are now subject to customs duties.
It is possible to self-account for VAT on imports through postponed accounting arrangements, which allows a responsible person to claim import VAT back in conjunction with declaring it on a VAT3 Return, as long as the standard conditions of deductibility are followed. In this simple reverse charge transaction, there is no need to pay the customs duties and taxes that would otherwise be due at the time of importation. So, in the same way as intra-community acquisitions are currently documented on the VAT3 Return, it is recorded as VAT that is both deducted on the “buy” and charged on the “sell.”
Customs value of items imported under Postponed Accounting as stated in Customs Declaration and Customs Duty has been added to the VAT3 Return. The VAT is then recorded on the T1 and T2 invoices (subject to the usual rules of deductibility).
Value added tax (VAT) returns have been updated to include extra fields PA2–PA4 to capture the Customs value of goods imported under postponed accounting, including custom duty.
Import VAT may otherwise have to be paid at the point of import and then recovered when the next VAT return is filed for VAT registered businesses following the UK’s exit from the EU. Postponed Accounting is meant to relieve these potential cash flow concerns.

3 Postponed Accounting Entries on VAT3 Return

On the VAT3 Return, the PA1 field should include the customs value of goods imported under postponed accounting, as stated in the custom declarations, plus the customs duty. All products imported under Postponed Accounting, which applies to all VAT rates, should be included in this figure. If Postponed Accounting was used on the Customs Declaration for these particular products, zero-rated imported goods should also be included in the PA1 field. The Tax and Duty Manual (TDM) Customs Manual on Valuation provides additional information and recommendations on the valuation of commodities for customs purposes.
T1 on the VAT3 return should include the VAT relevant to the PA1 field entry.
The T2 figure on the VAT3 Return should also include the VAT relevant to the PA1 field on the return (subject to the usual rules of deductibility).

4 Postponed Accounting Entries on VAT Return of Trading
Details (RTD).

The ‘Acquisitions from the European Union and Non-European Union’ section of the ROS online VAT RTD second screen is mentioned here. Those acquisitions are listed in the second column of the VAT RTD paper return. It is necessary to enter the value of the products purchased under Postponed Accounting arrangements in this area of the VAT RTD. The Customs value of goods imported under Postponed Accounting as stated in Customs Declarations and Customs Duty must be entered in the various areas.
The total value of the Postponed Accounting figures entered into the various VAT rate areas should be entered into the PA2 field. PA2 should additionally include zero-rated imported products if Postponed Accounting was applied to the Customs Declaration for these goods.
The third screen of ROS online VAT RTD refers to ‘Goods or Services Purchased for Resale (Irish or Intra-EU purchases, Postponed Accounting & Non-EU Imports). ‘ Such purchases are detailed in the third column of the VAT RTD paper return. Postponed accounting arrangements must be included in this part when submitting your VAT RTD. Items imported under Postponed Accounting, as specified in Customs Declarations, are subject to duty in addition to their customs value.
Postponed accounting figures entered in various VAT rate areas should all be entered in PA3 to equal this total value. If Postponed Accounting was applied to the Customs Declaration for zero-rated items, these goods should also be included in the PA3 field.

‘Other Deductible Goods and Services (Irish or Intra-EU purchases, Postponed Accounting & Imports)’ appears on the fourth screen of the ROS online VAT RTD. Such purchases are detailed in the VAT RTD paper return’s fourth column. Postponed accounting arrangements must be included in this part when submitting your VAT RTD. Items imported under Postponed Accounting, as specified in Customs Declarations, are subject to duty in addition to their customs value.
Postponed accounting figures entered in various VAT rate fields must equal the PA4 field’s total value. If Postponed Accounting was used on the Customs Declaration for these particular products, zero-rated imported goods should also be included in the PA4 column.

5 Who can avail of Postponed Accounting?

The Postponed Accounting arrangements are available to all responsible people in Ireland who purchase products from countries outside of the EU VAT area.
At 11:00 p.m. on December 31, 2020, all registered VAT and Customs & Excise (C & E) traders were automatically entitled to Postponed Accounting, thus they did not have to request for it.
Anyone who wishes to import products into Ireland after December 31, 2020, but who was not enrolled for C&E at 11:59 p.m. on that day, must do so by registering for an EORI number on ROS (the C&E Economic Operators Registration Identification (EORI) Number). Postponed accounting is automatically granted to those who enrol for C&E.
TDM Part 38-01-03b – Guidelines for VAT Registration should be consulted by all new applicants for VAT Registration who seek to take advantage of Postponed Accounting.
Under the Freedom of Information Act of 2014, the following information is either exempt from or does not have to be made public.

6 Commencement Date of Postponed Accounting.

Imports made after 11:59 p.m. on December 31, 2020, may be subject to postponed accounting procedures.

7 How long can Postponed Accounting be availed of?

Imported products arriving after 11:59 p.m. on December 31st, 2020 may be subject to the postponed accounting provisions described above. In order to maintain eligibility for Postponed Accounting, you must follow certain conditions, such as providing any requested information to the Revenue Commissioners.

Tax and Duty Manual VAT – Postponed Accounting
6
8 Is it Compulsory to use Postponed Accounting?

Although Postponed Accounting was introduced as a cashflow-alleviating mechanism for accountable persons, it is not required.
Import VAT can be paid in full at the time of importation and accounted for on a VAT return in the normal manner.
Deferred payment for VAT on imports can also be employed by authorised importers who can postpone payment of customs duties and VAT until the 15th day of the month following importation.

9 Conditions

In order to benefit from Postponed Accounting, an individual must meet specific circumstances and requirements. The accountable person must be able to demonstrate to the satisfaction of the Revenue Commissioners that they are in conformity with the conditions and requirements listed below when required to do so:
the VAT Consolidation Act 2010, the Tax Acts, the Capital Gains Tax Acts, the Statutes Relating to the Duties of Excise, and the Customs Act 2015 (No. 18 of 2015), as well as any instrument made under any of the enac statutes: (v).
Section 84 of the VAT Consolidation Act 2010 requires that the responsible party (b) maintains accurate and complete records.
As long as (c) the accountable person hasn’t been convicted of an offence under the Acts, and (d) if requested by the Commissioners, the accountable person has submitted any information or documentation as indicated below:
Evidence of the current and prior business addresses, if any, of the person responsible, including an address of their business premises and an address at which they do their business.

2) The person responsible for production, retail, storage, administrative, or other operations is responsible for them.
The source of any loans or other financing received by (or to be received by) the accountable person concerned, as well as the use or intended use of the moneys received by that person through those loans or financing; 4) information relating to the type, volume, and value of goods and services supplied to or by the accountable person concerned; 5) information relating to supply of goods or services to the accountable person concerned; 3)
Section 53A (1) of the VAT Consolidation Act 2010 specifies that information submitted by a taxpayer in order to account for tax must be accurate. The most current set of audited financial statements must also be provided.
If the Commissioners believe it is necessary to require more information in order to safeguard tax income, they may do so in accordance with section 1095 of the Taxes Consolidation Act 1997.
The responsible party will be excluded from Postponed Accounting under paragraph 5 of the Value-Added Tax Refund Act 2010 if they fail to satisfy the Commissioners that they have the necessary capacity and capability to account for and pay tax in accordance with the means referred to in section 53A(1) of the VAT Consolidation Act 2010. When a Notice of Exclusion is sent, it goes into effect on the date mentioned in the Notice. This is how it works:

Tax and Duty Manual VAT – Postponed Accounting
8
The following material is either exempt from or not required to be published under
the Freedom of Information Act 2014

10 Security Requirement

Under Section 109 VAT Consolidation Act 2010, revenue commissioners may ask the accountable person for security at the time of registration or at any point in the business’ life cycle. When it is evident that the exchequer needs protection, security bonds may be requested.