The Value Added Tax (VAT) Act in Ireland was introduced in 1972. The legislation of Irish VAT is currently based on EU directives as the country is a member of the European Union.
The official tax authority in Ireland is the Office of the Revenue Commissioners, established in 1923.
The standard VAT Rate in Ireland is 23%. However, certain good and services have a reduced VAT rate.
Reduced VAT Rates: 13.5% and 9%
The reduced VAT rate of 13.5% applies to certain goods and services including certain fuels, certain building services, the importation of certain works of art and antiques, the supply of live horses and of greyhounds.
The reduced VAT rate of 9% applies to certain goods and services including newspapers and periodicals, catering and restaurant supplies (excluding alcohol, soft drinks and bottled water), and hotel lettings, admissions to cinemas, theatres, certain musical performances, museums, art galleries or exhibitions, hairdressing services, short-term hire.
Furthermore, a Zero VAT Rate applies to basic food items, the rate for livestock is 4.8% and the flat-rate compensation percentage for farmers is 5.5%.
Due to the Covid-19 pandemic, the standard-rated VAT in Ireland was reduced to 21% between 1 September 2020 – 28 February 2021.
If the turnover of a business in a 12 month period exceeds the threshold, the VAT registration becomes obligatory. The threshold for intra-Community distance sales of goods and cross-border telecommunications, broadcasting and electronic (TBE) services is based on calendar year.
The thresholds in Ireland are the following:
However, businesses that do not exceed the threshold can also register for VAT voluntarily.
Non-established businesses have to register for VAT in Ireland if they supply services or taxable goods to taxable customers in the country.
To submit a registration for VAT in Ireland, form TR1 (individuals, sole traders, trusts, partnerships) or TR2 (limited companies) should be filled, signed and sent to the Tax Authority online.
The most common period for VAT returns is bi-monthly, however if the company is in a constant repayment position, they might be required to submit VAT returns on a monthly basis.
Each business has to submit an Annual Return of Trading Details, which is a more detailed return than the VAT returns regularly submitted through the year. It is also possible to submit annual VAT returns with monthly direct debit instalments.
The details on a VAT invoice are crucial for establishing VAT liability on the goods or services provided, and it also enables VAT registered customers to reclaim VAT charged. There are certain requirements regarding the content of an invoice, which includes:
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VAT returns are due to be submitted by the 19th of the month following the reporting period. However, for businesses that file and pay electronically through ROS, a deadline extension is available to the 23rd day of the month instead of the 19th.
Businesses can complete and submit their VAT3 return online in the ROS account, or complete the form in ROS Offline and use an uploader file for submission. The Annual Return of Trading Details should also be submitted online.
For intrastat submission, and for EC Sales Lists that are more than 30 lines, the forms can only be completed by using the ROS offline application, and then using an uploader file for submission online.
Irish businesses have the opportunity to appoint an agent to act on their behalf regarding their VAT compliance, however it is not compulsory. If the company would like to give authority to an agent, a form named Agent Link Notification has to be filled, signed and sent to the Revenue online.
It is not compulsory to have a fiscal representative in Ireland for VAT purposes.
The Import One Stop Shop was introduced on 1 July 2021. The main goal of IOSS is that a taxable person can register in only one EU Member State to declare and pay all EU VAT due on the goods imported within the scope of IOSS.
It can be used for goods that are located outside the EU at the time of being sold, they are dispatched in consignments of an intrinsic value not exceeding EUR 150, and they are not subject to excise duties. If the supplier is registered for IOSS, all import VAT due under IOSS through the EU can be remitted in one return. Businesses established in Ireland can register for IOSS in their online Revenue account.
February 2022: VAT exemption to small business VAT registration approved
March 2020: Real Time Reporting
November 2019: Government Submits Tax Bill
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