Who should register for VAT?

Updated on May 16, 2022

Overview

The VAT registration rules are discussed in this section. The following is what it explains:

who has to be a VAT registrant

The tax brackets are referred to as VAT thresholds.

deciding to get VAT registered

When lettings can be taxed.

As a rule, if you’re an accountable individual, you’ll need to file for VAT.

VAT registration is not required for those engaged in exempt or non-taxable activity. A person who engages in tax-exempt or non-taxable business operations may, under certain conditions, be required to file a VAT return.

Purchasing products from other countries’ citizens

or

the use of outside assistance.

An application to start a new company

As long as you’ve started a business, you can claim back VAT on your start-up expenses. However, in order to do so, you must be VAT registered.

Prior to the start of business, you can claim VAT on purchases.

As a general rule, traders whose turnover falls below the VAT threshold are not required to register for VAT. However, they have the option of registering for VAT.

For details on how to register for the following events, see ‘Further guidance.’

Several student organisations

Protective organisations for business

exploration businesses for gas and oil.

What are the VAT thresholds?

A VAT registration is required if your revenue is expected to exceed the VAT thresholds or has exceeded them in the past. The thresholds are based on the amount of money you make in a year-long period.

In order to qualify for cross-border TBE services, as well as intra-Community distance sales of goods, your annual revenue must exceed a certain threshold.

You may choose to register for VAT even if your revenue falls below a predetermined level.

The following are the most important cutoffs:

It costs €37,500 if a service provider is the only one involved.
If you’re a taxable person that sells products or services via mail-order, you’ll have to pay €10,000. For this purpose, the total value of intra-Community distance sales of goods and cross-border TBE services provided to customers in all EU Member States (or “deemed suppliers”) is taken into consideration. When the supplier is established and has a permanent address, or normally resides in a single Member State, the threshold is not applicable As a result of such supplies, the supplier must register for Irish VAT. For more information, check out the intra-Community distance sales of commodities and the Electronically supplied services websites..
€41,000 for EU citizens who purchase goods and services from outside the EU.
€75,000 will be given to people who supply goods.
€75,000 is available to those who provide both goods and services, with the supply of items accounting for at least 90% of total revenue. However, the 90 percent turnover may not necessarily cover all goods and services sold.
Goods sold at standard or discounted prices, as well as those made or produced using zero-rated materials, are not included in the 90 percent statistic.
While not residing in the state, an individual must register and keep track of their VAT if they provide any of the following services:

products and services that are taxable to ‘taxable customers’ in the state
This holds true regardless of the volume of business.

Your turnover is calculated in what way?
It’s possible that your revenue will go beyond the cutoff point. VAT registration may not be required of you.

The VAT paid on stock purchased for resale may be deducted from the turnover figure for registration purposes. You should check to see if you can register for VAT using this lower turnover figure.

In order to determine your turnover for VAT registration, you must utilise this modified amount.

Example
Michael’s business generates €80,000 in revenue per year.

He has paid €11,220 in VAT on the merchandise he purchased for resale.

When figuring out if he’s crossed the line, Michael can take the €11,220 out of his total revenue.

€68,780 – €11,220 = €80,000.

He is not required to register because the adjusted turnover falls below the €75,000 threshold.

Next: Persons required to register solely because of goods or services acquired from abroad

Persons required to register solely because of goods or services acquired from abroad

For the most part, the following people don’t need to register for VAT in the state:

Unregistered VAT-paying companies
Banks and other enterprises that are exempt from taxes
Institutions of the state and municipal government, as well as state and semi-state organisations
Breeders of racehorses, fisherman, or farmers.
Then then, if they get taxable services from outside the state or within the EU, they may have to register and account for VAT.

Persons who are not subject to taxation in the EU yet purchase items from other EU countries
People who are exempt from VAT, as well as some non-taxable entities, are required to keep accurate records of their transactions. Such situations include those in which they purchase or are expected to purchase goods from other EU member states.. For items worth more than €41,000 and expected to cost more than that in the next 12 months, you must file for registration.

It is possible that flat-rate fishers and racehorse trainers will be compelled to register if they receive items of this nature. As long as they don’t engage in commercial farming or fishing, they can keep their unregistered status.

In order to claim back VAT, you must be a taxable or exempt person.

Persons who are not subject to taxation in the United States yet receive taxable services from another country
If they obtain taxable services from overseas, exempt people and certain non-taxable persons must register and account for VAT. Regardless of the value of the services provided, this obligation exists.

Flat-rate farmers, fishermen, and race-horse trainers are required to register if they use these services. As long as they don’t engage in commercial farming or fishing, they can keep their unregistered status.

In order to claim back VAT, you must be a taxable or exempt person.

The cost of VAT on services received from afar
Taxes on invoiced amounts must be paid to Revenue at the appropriate Irish VAT rate in your monthly VAT report. At the same time, you may be able to claim back the VAT.

If you provide the provider with your VAT number, you will avoid paying VAT in the other EU Member State by doing so.

Next: Who may elect to register for VAT?