VAT - Understanding the Basics

VAT is a tax that's charged on most goods and services that VAT-registered businesses provide in Ireland. It's also charged on goods and some services that are imported from countries outside the European Union (EU), and brought into Ireland from other EU countries. VAT is charged when a VAT-registered business sells to either another business or to a non-business customer. When a VAT-registered business buys goods or services they can generally reclaim the VAT they have paid.

Depending on the nature and location of the trade you are carrying out, you may need to register for VAT in Ireland.

Some of the more common questions in relation to VAT are as follows:

• WHAT IS VAT?

VAT is a tax charged on the sale of goods or services. It is included in the price of most products and services. It is a tax on consumer spending, everyone who pays for goods and services pays VAT.

• WHAT ARE THE CURRENT VAT RATES IN IRELAND?

There are three rates of VAT in Ireland. The standard rate is 23% whilst the reduced rate is 13.5%. Some goods and services can qualify for the 0% rate.

• WHEN DO I NEED TO REGISTER FOR VAT?

You will need to register for VAT if either of the following apply to you:

1. You are supplying services with an expected turnover in excess of €37,500 in a 12 month period
2. You are supplying goods with an expected turnover in excess of €75,000 in a 12 month period

• WHY DO I NEED TO REGISTER FOR VAT?

All companies and individuals who meet the criteria above, are obliged by Law to register and charge VAT on their sales. The VAT collected is then paid over to the Revenue on a VAT return, usually every 2 months, although is some cases, this can be done every 4 months, or even annually.

• HOW DO I REGISTER FOR VAT?

VAT registration can be applied for through the Revenue online system. Your tax agent / accountant will be able to do this for you. Alternatively, you can register for ROS online yourself, and file the application this way. It is also possible to fill in a Form TR2 application, and submit it by post. This form can be obtained on the Revenue website, www. revenue.ie

• WHERE CAN I GET MORE INFORMATION?

Should you require any further information, don’t hesitate to contact our dedicated team of Accountants here.

Email: info@iconaccounting.ie

Phone: 01 8077106