VAT - Understanding the Basics

Value-Added Tax (VAT) is a tax applied to most goods and services in Ireland. If your business is VAT-registered, you will charge VAT on the goods and services you provide and may reclaim VAT on purchases you make. Understanding when and how to register for VAT, as well as the applicable rates, is crucial for compliance and efficient tax management.

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?

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 must register for VAT in Ireland if your business exceeds the following thresholds:

• Services: €42,500 annual turnover
• Goods: €85,000 annual turnover

• 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