About Value Added Tax (VAT)

VAT is an indirect tax levied on consumption; it is levied on  transaction unlike direct taxes which are applied to profit.

The price of goods or services supplied is increased by the VAT amount.

A person in business who makes supplies of goods in a 12 month period which will or are likely to exceed € 75,000 is required to register for VAT. The registration threshold for supplies of services by a business person is €37,500.

A person registered for VAT is referred to as an accountable person.
VAT must be charged in each of the following circumstances:

  • A person in business supplies goods or service, for consideration, in the State.
  • The importation of goods into the State.
  • The Intra-community Acquisition (purchases from other EU member States) of goods and services into the State by a taxable person.
  • The Intra-community Acquisition of a new means of transport in the State.

VAT was adopted by Ireland on it’s accession to the European Community (now European Union). It is a European Union tax therefore the European Sixth VAT Directive 2006/112/EC (Recast Directive) is the  main body of legislation governing VAT. The provisions on the Directive are enacted in Ireland in the Value Added Tax Consolidation Act 2010 and Value Added Tax Regulations 2010.

Rates of Tax (VAT)

  • 23% Standard rate on goods and services.
  • 13.5% Reduced rate applicable to fuels, maintenance services and supplies of immovable property.
  • 9% Reduced rate applicable to the tourism and hospitality sector mainly.
  • 5.4% Flat rate addition. Farmers not registered for VAT add a Flat-Rate percentage to their sales of produce and agricultural services to VAT registered customers who are entitled to reclaim such VAT.
  • 0% on certain items such as food, and children’s clothing and footwear.
  • Exempt goods and services such as financial, medical and educational services.

Due Dates (VAT)

A VAT return must be filed in each taxable period. There are six taxable periods in a year, Jan/Feb, Mar/Apr and so on.

Each return must be filed electronically with the accompanying payment or refund being debited from or credited to the taxpayers account. The due date for filing a return is on or before the 23rd of the month following the end of the taxable period i.e. by 23rd March for January/February.

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