Who should register for VAT?

Updated on February 8, 2022

Overview

Value-added tax (VAT) registration rules are covered in this section. The following is what it explains:

Individuals who have taxable income

The tax brackets

deciding to become a VAT registered business

when it is possible to impose a lettings tax

An accountable person, in general, is required to register for VAT.

 

A person can’t register for VAT if all of their activities are exempt or non-taxable. In some cases, a person engaged in exempt or non-taxable activity may be required to register for VAT.

 

the acquisition of products from outside the United States

or

the use of outside assistance.

Registration of a new business

It is possible to deduct VAT on your startup expenses even if you are not yet selling taxable goods or services when starting a firm. In order to do this, you must first be registered with the VAT authorities.

A VAT refund is available for purchases made before the company’s first day of business.

VAT registration is not required for farmers and fishermen, as well as small-scale traders with yearly revenues below the VAT threshold. Although they can register for the Value-Added Tax, they have the option of doing so (VAT).

See “Further instructions” for further information on how to sign up.

Some student unions have formed trade organisations to protect their members’ interests in gas and oil exploration.

What are the VAT thresholds?

In order to register for VAT, you must have a turnover in excess of the VAT thresholds. The thresholds are determined by the amount of money you’ve made over the course of a year.

Inter-Community goods and cross-border TBE services can only be sold if you have a calendar year’s revenue of at least a million dollars.

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

The following are the main thresholds:

€37,500 for those who just provide services.
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. As long as the provider is based out of only one EU country, the criterion does not apply to them. To avoid this, the provider must be registered for Irish VAT in the case of such purchases. For more information, check out the intra-Community distance sales of commodities and the Electronically supplied services webpages.
For EU citizens who purchase goods and services from outside the EU, the tax rate is €41,000 per transaction.
It costs €75,000 to be a supplier of goods.
People who sell both goods and services, but whose primary source of revenue comes from the sale of commodities, must pay €75,000 in taxes. However, the 90 percent turnover may not necessarily represent all goods and services sold.
Only goods that are offered at standard or discounted rates and manufactured using zero rated materials are included in the 90% statistic.
If a person is not established in the State, he or she must register and account for VAT if he or she is providing goods or services:

products and services that are taxable to ‘taxable customers’ in the state
Regardless of the company’s turnover, this rule holds true.

How is your turnover determined?

If your revenue is higher than the threshold, you should be concerned. It’s possible, however, that you won’t have to register for VAT.

For tax purposes, the amount of VAT paid on resale goods can be deducted from the turnover figure. To see if you qualify for VAT, you should use this lower turnover amount.

Example

You only need this figure for VAT purposes.

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

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

When assessing whether Michael has crossed the barrier, he can subtract €11,220 from his turnover amount.

There are €68,780 in €80,000.

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

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

As a rule of thumb, the following individuals are excluded from the state’s VAT registration:

VAT-paying organizations that are not registered
Banking and credit card firms are free from this regulation.
Aside from the usual suspects like municipalities, state agencies, and semi-autonomous groups, there are a variety of other occupations that could fall under this category.
However, if they obtain services for a price from outside the state or from intracommunity acquisitions, they may be forced to register and account for VAT.

Exempt persons and certain non-taxable persons acquiring goods within the EU

In some cases, exempt and non-taxable persons must register and account for VAT. Other Member States’ goods may be purchased in these scenarios, as well. For items worth more than €41,000 and expected to cost more than that in the next 12 months, you must file for registration.

There may be a requirement for flat-rate farmers and fisherman, as well as race-horse trainers who receive such items at a fixed fee to register. For farming and fishing, they can keep their unregistered status.

Exempt or non-taxable individuals cannot seek their VAT back.

Exempt persons and certain non-taxable persons receiving taxable services from abroad

If they get taxable services from overseas, exempt individuals and some non-taxable individuals must register and account for VAT. This commitment exists regardless of how much those services are worth.

Farmers, fishermen, and race-horse trainers who receive services at a flat charge are required to register. For farming and fishing, they can keep their unregistered status.

Exempt or non-taxable individuals cannot seek their VAT back.

Paying VAT on services from abroad

VAT on the invoiced amounts must be paid to Revenue at the relevant Irish VAT rate, which must be reported on a regular basis. 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 Member State by doing so.

Who may elect to register for VAT?

Value-added tax (VAT) registration is available to the following establishments in the state:

Businesses that do not exceed the VAT thresholds, such as farmers and fisherman.

Can you back date your election to register?

It’s not possible to register for VAT if you haven’t done so yet.

Obligations after VAT registration

When registering for VAT, the process is exactly the same as when you are ‘obligated’ to register.

Option to tax lettings

Value-added tax does not apply to the rental of a property (VAT). Although you can choose to tax the rental of some homes, you can’t tax all of your properties. It is possible to limit the choice of taxing rentals to just one or a few homes, though.

In order to tax a letting, you will have to register and pay VAT on the rents that are generated by the rental premises.

The following items are not subject to taxation:

rental of a house or apartment.
A letting in which the tenant has less than 90% deductibility amongst connected people.