Ireland

VAT Basics

Ireland has opted for the reduced VAT rates on a number of items allowed by the VAT Directive.

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Irish VAT Rates by goods and services

The standard VAT rate is 23%. The standard VAT rate generally applies for all goods and services for which no exemption, 0% or one of the reduced VAT rates is foreseen.

The first reduced VAT rate is 13.5%. This reduced rate applies to electricity, restaurants and catering, repair, cleaning and maintenance services, construction, among others.

In addition, there is a reduced VAT rate of 9%. This reduced rate applies, in general, to magazines and newspapers, both paper and electronic versions, entry to sporting events, hairdressing and tourism, among others.

Supplies and services at 0% are the standard supplies, such as exports or intra-Community supplies, as well as books, most foodstuff, oral medicines, children's clothing and footwear, among others.

Finally, some supplies are VAT exempt, such as postal services, financial and insurance transactions and immovable property rental.

For a precise confirmation of the VAT rate applicable to your product or service in Ireland, we recommend that you contact us.

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VAT Deduction Limits in Ireland

Input VAT is generally deductible as long as the goods or services are used for business purposes.

However, certain expenses are subject to special rules:

• Food, drink or other personal services to the taxpayer, agents or employees: input VAT is not deductible, unless they are part of a taxable supply of services.
• Food, drink, accommodation or other entertainment services, where it forms all or part of the cost of providing advertising services are not deductible.
• Hotel accommodation: input VAT is not generally deductible, unless this refers to qualifying accommodation in connection with attendance at a qualifying conference. A qualifying conference means the supply to a delegate of a service consisting of the letting of immovable goods or accommodation for a maximum period starting from the night prior to the date on which the qualifying conference commences and ending on the date on which the qualifying conference concludes. Input VAT is 100%, however, where a delegate attends for only part of the duration of the conference, entitlement to deduct the VAT incurred on the accommodation is reduced accordingly.
• Business entertainment: input VAT is generally not deductible.
• Passenger motor vehicles: input VAT is generally not deductible, unless this refers to vehicles used as stock in trade. Also, if the expense refers to qualifying vehicles, input VAT deduction up to a 20% is allowed. A qualifying vehicle shall be a vehicle that is used for at least 60% business purposes (for a period of 2 years or more) and either i) was first registered for Vehicle Registration Tax (VRT) purposes on or after 1 January 2009 up to 31 December 2020 and has CO2 emissions of less than 156g/km (i.e. CO2 emission bands A, B and C) or ii) was first registered for Vehicle Registration Tax (VRT) purposes on or after 1 January 2021 and has CO2 emissions of less than 140g/km (i.e. CO2 emission bands A and B).
• Attendance to qualifying conferences, fairs and exhibitions: input VAT is 100% deductible.
• Petrol: input VAT is not deductible.
• Cars, vans and trucks cost: the deduction of input VAT is restricted, particularly when it comes to vehicles for mixed use. We recommend check the guidelines in detail.

A valid and fully compliant VAT invoice must be issued for each expense on which VAT is deducted.

You may have a look at the official information from the Irish tax website on VAT deduction limits.

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Statute of Limitations in Ireland

The statute of limitations is four years in Ireland. However, there is no time limit in cases of fraud or neglect.

The statute of limitations period determines the periods on which the tax authority can go back to review the information declared, and apply additional VAT assessments, penalties or interests.

The statute of limitations also determines the period a taxpayer can voluntarily correct any errors on past submissions, as well as deduct input VAT. This is four years. A valid VAT invoice or customs document is required to claim for input VAT refund.

You can find an overview of the statute of limitations in Europe under the following link.

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Tax point rules in Ireland

The tax point is the time when VAT becomes due. VAT due should be distinguished from VAT payable. VAT is due when the tax point occurs. VAT is payable between the day after the end of the reporting period and the due date to submit and pay the VAT return.

• General rule: When the supply of goods or services is subject to the mandatory issuance of an invoice, then the tax point is by the of issuing the invoice. If you have not issued an invoice, then VAT is due by the time of the supply of the goods or services, or by the time a prepayments or advanced payment is received.
• Continuous supplies of utilities (gas, electricity and telecommunications): Tax point is considered to have occurred when the utility company issues the bill to the customer.
• Intra-Community acquisitions and supplies: Tax point occurs on the invoice date or the 15th day of the month following the month in which the invoice was issued, whichever occurs earlier.
• Import: Tax point occurs when the goods are imported according to the relevant import documents.

Find here official information about when VAT is due in Ireland. Find also here the rules for services taxable at the rate of the goods.

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VAT Registrations and Simplifications in Ireland

When Do I Need an Irish VAT Number?

Generally, a foreign business must register for VAT (Value Added Tax) in Ireland as soon as a taxable supply is made. The following are the usual examples of taxable transactions:

• Domestic supply of goods not reverse charged: A supply of goods located in the Ireland where reverse charge does not apply requires a VAT registration of the supplier.
• Supply of services not reverse charged: Foreign non-established businesses supplying services on which Irish VAT is due by the supplier must register for VAT. These services are rather exceptional, as the general B2B rule would apply.
• Imports of goods in Ireland: when a non-established trader imports goods under his or her own name, a VAT registration is required in Ireland.
• Export: Exporting goods to a non-EU country requires a VAT number before the export is made.
• Intra-Community acquisition: Acquiring goods from another Member State where all conditions for intra-Community movements are met requires the customer to register for VAT.
• Intra-Community supply: Supplying goods another Member State is also a taxable transaction that obliges the supplier to register for VAT.
• Distance sales: When applicable in case the Seller has not joined OSS. See the E-commerce manual for more information.

Non-established companies must submit apply for VAT registration before performing any of the above taxable transactions. There is no turnover threshold applicable to non-established companies.

Irish established companies can benefit from a VAT registration exemption threshold ranging from EUR 41,000 to EUR 75,000. The thresholds are calculated based on your turnover in any continuous 12-month period, and they depend on your activity, for example, if you are an Irish establish company supplying goods, you can benefit from the VAT registration exemption threshold of EUR 75,000, while if you are making intra-Community acquisitions of goods, the threshold reduces to EUR 41,000. In any case, a voluntary VAT registration is allowed.

Backdated registrations are allowed in Ireland upon agreement with the tax office. You will need to regularize past reporting periods as from the registration date.

Input VAT incurred previous to the VAT registration may be normally deducted, provided that the cost complies with the VAT deduction limits in Ireland. This input VAT will be included in the first VAT return submitted by the taxpayer and a backdated registration is required.

Check here the official information about Who should VAT register in Ireland. Also, have a look at the guide for non-establish businesses concerning VAT registration. Finally, check  the obligation to VAT register in Ireland to make an import.

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VAT number format in Ireland

• Country code: IE
• Structure: IE 9999999L
• If you are registered for VAT in Ireland, the VAT number is formed using the country code IE and 8 or 9 digits.

Find  and  you will find general information about EU VAT numbers.

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Fiscal Representative Requirements in Ireland

Some countries require all non-EU companies to appoint a fiscal representative when registering for VAT. However, this requirement does not apply in Ireland.

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VAT Groups in Ireland

VAT grouping is possible in Ireland for businesses established in Ireland. Group members must be closely bound by financial, economic, and organizational links, so they may form a VAT group and be treated as a single taxable person for VAT purposes in Ireland.

In addition, the following VAT grouping rules apply in Ireland:

• Only Irish established business can be part of a VAT group. It is not a condition that every member of the group has to be an accountable person. Holding companies are permitted to be part of a group.
• VAT grouping is optional in Ireland and, once is formed, the group members are treated as a single taxable person. VAT group registration is subject to approval by Revenue based on the interest of efficient administration.
• Invoices: each member of the group must issue an invoice for its individual supplies under its own name and quoting its individual VAT number.
• Intra-group transactions are disregarded for VAT purposes.
• Every group member is jointly and severally liable for the VAT debts and penalties of the entire group.
• One of the members of the group is established as the group remitter. This member becomes responsible for dealing with all VAT requirements for the whole group: including the submission of VAT returns and making VAT payments

Learn more about VAT groups in Ireland.

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Consignment and Call-off stock in Ireland

The EU introduced a call-off stock simplification that all EU Member States must implement. This was put into place so that businesses that operate under a consignment stock structure do not have to VAT register in the country of destination. Ireland has introduced the consignment stock simplification.

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Irish Bad Debt Relief

Bad debt refers to an unpaid invoice for which the Supplier has paid the VAT to the tax administration: this is, an invoice has been issued with VAT, reported in the VAT return and the VAT amount has been paid to the tax authorities but the whole price has not been collected from the customer. This is often due to the client´s bankruptcy, insolvency or simple missed payments to suppliers. In these cases, most countries allow to recover the VAT initially paid to the authorities, however, the conditions change from one country to another.

Bad debt relief refers to the possibility of recovering the VAT from that invoice. Ireland allows for bad debt relief, unless for taxpayers under the cash accounting scheme.

Bad debt relief is done by adjusting the output VAT paid in the periodic VAT return, i.e., by increasing the VAT on purchases figure in Box T2 on the VAT return form.

Before proceeding with the bad debt relief, it is required that the supplier has carried out reasonable steps to obtain the payment of the debt.

• Actions taken include correspondence with the debtor, referral of the issue to a solicitor or a debt collection agency or other action undertaken which results in objective evidence that the trader is in a position to reasonably consider that the debt is bad.
• Suppliers are required to retain evidence of action taken, including all correspondence, in attempting to recover the debt

Find here the official information about bad debt relief in Ireland, as well as the official guidance available to download.

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Irish Import Deferral and Postponed VAT Accounting

Ireland has introduced a postponed import VAT accounting mechanism where import VAT can be reported as input and output VAT (reverse charged) in the VAT return instead of being paid to the authorities upon importation. Postponed import VAT accounting applies automatically if conditions are met. Taxpayers do not need to file a separate application. The VAT Return and Annual Return of Trading Details (VAT RTD) require include the correspondent reporting entries relating to postponed accounting.

Import VAT deferral, meaning delaying the payment of VAT for a given period, is also applicable in Ireland. VAT deferment accounts allow importers to pay import VAT and customs duties on the 15th day following the end of the month. To apply for deferred payment authorization, the taxable person must already hold a customs guarantee with the Revenue Commissioners.

Find here and here more information about postponed import VAT accounting in Ireland.

Have a look at our general article about postponed import VAT accounting.

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Irish Customs and VAT warehouses

Customs or bonded warehouses are available for goods that have not cleared customs in the EU (T1). VAT and excise duties are not due when these goods are directly placed in the Customs warehouse. As soon as they exit this regime, these amounts are due. Sales within the customs warehouse are zero-rated.

VAT warehouses are available for cleared goods (T2). These goods have already paid customs duties. The conditions are similar to those of Customs warehouses. The goods allowed are those included in Appendix V of the VAT Directive.

Read more about Customs warehouses. Also, find here additional information.

Finally, find here official EU guidelines on Customs’ special regimes.

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Special VAT Schemes in Ireland

Businesses may benefit from the following special VAT regimes:

• Small businesses – only for established companies-.
• Farmers. Find more information here.
• Travel agents
• Margin scheme
• Cash accounting, moneys received basis of accounting. Find more information here.

Have a look at our website articles about TOMS and the Cash accounting scheme.

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Reverse Charge in Ireland

Reverse charge for Non-established Companies in Ireland

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses.

Ireland has introduced this reverse charge on certain supplies. Domestic supplies of services performed by a non-established supplier in Ireland fall into the reverse charge mechanism provided that all the requirements are met:

Check here the official guidance about construction services by non-established suppliers in Ireland.

An additional scenario consists of non-established traders supplying gas through the natural gas system or electricity:

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Reverse Charge on B2B Services

Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.

According to the general B2B rule, any business resident outside Ireland supplying services to an Irish based customer will not charge any VAT and the transaction will be reverse charged by the customer.

There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Ireland provided the following conditions are met:

• Services connected to immoveable property are located where the property is located.
• Passenger transport services will be located where the transport takes places (apportioned if necessary).
• Catering services are located where the catering takes place.
• Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
• Access to conferences, fairs and exhibitions is located where the event takes place.

The general rule may also be deviated where the supplier has a permanent establishment in the country of the customer and the PE has intervened in the supply.

Find out more about the rules for B2B services in the EU here. Also, find here and here official information by the Irish tax authorities.

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Reverse charge on specific goods and services in Ireland

Domestic reverse charge may also apply to domestic supplies of certain goods and services made by companies in Ireland. The following reverse charge scenarios apply irrespective of the country of establishment of the Supplier:

• Supplies of CO2 or greenhouse emission allowances.
• Supplies of scrap metal. Find here more information.
• Supplies in the construction industry to a principal contractor by a subcontractor, regardless of the status of the subcontractor as established or non-established business in Ireland.
• Supply of construction work in Ireland between two connected persons.

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VAT returns in Ireland

Frequency of VAT returns in Ireland

The standard frequency of filing of the periodic VAT returns is bi-monthly, commencing on the first day of January, March, May, July, September and November. However, tax authorities may authorize different reporting period depending on the annual turnover:

In additional to the periodic reporting, taxpayers must also complete an additional recapitulative return on an annual basis: the Return of Trading Details (RTD). The RTD form details the total purchases and sales for the year, broken down by the VAT rate.

Find here the official information about reporting periods and deadlines in Ireland.

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Due date of Irish VAT returns

The VAT return deadlines applicable in Ireland depend on the way of submission:

Find here more information about the applicable deadlines.

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VAT payments in Ireland

VAT payments in Ireland must be made electronically. There are several online methods available, although at Marosa we follow the ROS Direct debit instruction (RDI):

• ROS Direct debit instruction.
• Single debit instruction (SDI).
• Direct Debit Instruction (DDI).
• Credit and debit cards.

Have a look here, here and here at the information about how to pay taxes in Ireland. At Marosa we usually set up the direct debit method for our clients.

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VAT Refunds in Ireland

The excess of input VAT is automatically and immediately refunded to the taxpayer. This is, when a taxable person declares more VAT deductible – e.g., due to purchases-, than VAT collected from sales, the difference is a VAT credit which shall be reimbursed to the taxpayer.

In order to correctly receive the VAT refund, it is important that the tax authorities have the right information about the taxpayer’s bank account.

Revenue must pay interest if a VAT refund has not been made after the expiry of 93 days from the date of receipt of a valid claim for repayment.

The refund may be withhold by the tax administration in case there is outstanding tax returns or debts.

Check here and here more details about VAT refunds. Also, you will find here more information about the interest that may be due in case of delays in refunding VAT.

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Nil and Corrective VAT Returns in Ireland

A nil VAT return needs to be submitted even if there are no transactions to be reported for that period.

Errors or omissions in a VAT return must be corrected, even if they do not impact on the VAT position for the corresponding period. You will need to submit a corrective return. The corrective VAT return replaces the previous return submitted for the same period in full. This means that the corrective return must include all details that were already correct in the original return as well as the corrected details. Additionally, if there is additional output VAT to be paid as a result of the correction, you should do it.

To amend a VAT3 return you need to proceed as if to file a new VAT3 and then click the 'Additional' button to see the list of reporting periods available for amendment.

When submitting a corrective VAT return, penalties and interest may apply.

In any case, the general deadline to make corrections on previous reporting periods is 4 years calculated from the accounting period or tax year which the tax concerns.

Find here and here the official instructions about making corrections to VAT returns.

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Annual VAT returns in Ireland or RTD

Irish taxpayers must submit an annual VAT or annual Return of Trading Details (RTD). This is a recapitulative return for informative purposes, therefore, normally, there is no VAT payment due upon its submission.

The RTD form details the total purchases and sales for the year, broken down by the VAT rate. The amounts reported in the RTD must reconcile with the amounts reported in the periodic VAT returns submitted. The form is displayed in the company’s ROS inbox.

In case of no activity, a nil return with 0 in all boxes needs to be filed.

The usual deadline is the 23rd January of the following year. However, the deadline may vary depending on the taxpayer’s accounting period, or even registration date. You must check this deadline at the ROS account of the taxpayer. Learn more about RTD from the official website of the tax authorities.

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VAT Penalties in Ireland

Interest is applied if you do not pay VAT on time. It is charged on a daily basis from the date the VAT payment is due until you pay the amount outstanding. The rate of interest is 0.0274% per day, or part of a day.

Additionally, penalties can arise if you do not pay VAT on time or you do not comply with your reporting obligations. Particularly, when it is appreciated a deliberate or careless behavior from the taxpayer. Fixed penalties are usually established at EUR 4,000.

In general, it is possible to perform a self-correction without penalty if the corrective return is submitted before the due date of Income Tax or Corporate Tax returns for the reporting period within which the VAT period ends.

Also, where a tax default is not deliberate and the taxpayer showed reasonable care in complying with the tax obligations assigned, a correction can be made without penalty. However, the statutory interest will apply. The following criteria is considered to avoid imposed a penalty for self-correcting a reporting period:

• Whether the taxpayer has kept proper books and records,
• The previous compliance record of the taxpayer,
• The materiality of the error being corrected, and
• The frequency of any error which, if it occurred in isolation, might be considered innocent

Separately, taxpayers can make use of the procedure Expression of doubt, by which the taxpayer raises a reasonable question about the correct VAT treatment of a particular transaction.

Finally, under certain circumstances, the tax authority may issue a VAT assessment or a VAT estimate:

• You may also receive a VAT assessment where the tax authority have reason to believe that the taxpayer has not paid the correct amount of VAT, or has claimed an excess of VAT and has received this amount. In these cases, the Revenue sends a formal notice to the taxpayer.
• You may receive a VAT estimate when you failed to submit your VAT return.

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Irish Tax Authorities Contact

• Email address: BusinessTaxesRegistration@revenue.ie
• Messages must be sent through My Enquiries chat at ROS portal.
• Contact our ROS Payment Support Unit: International customers may contact us at +353 1 702 3052.

Intrastat returns

Taxpayers are encouraged to use the  option in ROS, selecting the categories “VIES, INTRASTAT and Mutual Assistance (VIMA)”.

• Email address for Intrastat or VIES filing enquiries: vimahelp@revenue.ie
• Email for the classification section (Commodity Codes): tarclass@revenue.io
• Email for ROS registration: roshelp@revenue.ie
• Phone: +353 (0) 1 7383653

Postal address

Personal Division. Service to Support Compliance. Branch 3

14/15 Upper O’Connell Street

Dublin 1

D01 YT32. Ireland

Customs contact

• General Email address: ecustom@revenue.ie
• Email Import VAT policy: E-commerceandCustomsVAT@revenue.ie
• Email for Customs Import Procedures: importpolicy@revenue.ie
• Email for Customs temporary admission: customsreliefs@revenue.ie
• Email for Customs
• Phone: + 353 67 63139 ; +353 1 738 3676
• Check the following link .
• Exchanges rates

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ESL Returns in Ireland

Due Date and Frequency of ESL Returns in Ireland

The due date for submitting monthly or quarterly ESL returns is always the 23th day of the following month.

ESL returns shall be submitted electronically on ROS:

• ROS can accommodate a ESL return (or VIES Statement) up to a maximum of 30 lines by inputting the details directly on-line.
• Offline application: If the number of lines is more than 30 and less than 6,000, the ROS off-line application must be used.
• Only exception are Traders required to submit old statements: in this case, a paper ESL return must be filed.

The applicable reporting period shall be monthly if the value of the supplies exceeds the quarterly threshold of EUR 50,000 for goods. Suppliers of services may opt to file quarterly or monthly statements only.

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Nil and Corrective ESL Returns in Ireland

If there are no intra-Community transactions to be reported in a given period, a nil an ESL is due in Ireland. It is one of the few countries mandating the submission of a nil ESL return.

In case of errors in previous reporting periods, you must submit a corrective ESL return in Ireland. You should file a corrective VIES statement in ROS, selecting the corresponding reporting period, because already submitted, it will open in Amend mode. This new statement replaces the one earlier you had filed previously: you can amend transaction values; to delete a transaction you must move it to zero value; to add a new transaction you just have to select the option “Add customer”; to change the “Supply type” of a transaction, you must delete it – by changing it to zero- and record a new transaction.

Appendix 4 of the official manual on VIES declaration provide further guidance, including the following remarks:

• The online Correction facility is not available for Returns submitted for periods 2021/01 – 2021/05 which contain Northern Irish ‘XI’ VAT numbers.
• The Correction facility is not available on the ROS Offline Application.
• Corrections are updated overnight after the Correction is signed and submitted.
• Once the overnight update has occurred no further online Corrections can be made.
• Where an online Correction cannot be made, please submit a paper Correction form.

You will find here information on how to correct ESL returns in Ireland, please refer to Appendix 4.

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Penalties for ESL Returns in Ireland

Failing to comply with VIES/ESL regulations is punished with a fixed penalty of EUR 4,000 per return outstanding.

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Intrastat returns in Ireland

Frequency of Filing and Due Date of Intrastat Returns in Ireland

Like in most EU countries, Irish Intrastat returns are filed monthly. They follow the calendar month.

Intrastat returns are due on the 23rd day of the calendar month immediately following the end of the month to which the declaration relates.

Intrastat returns must be completed in EUROS currency in Ireland.

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Irish Intrastat Thresholds

The following annual Intrastat thresholds apply in Ireland (calendar year):

• Arrivals: EUR 500,000
• Dispatches: EUR 635,000

These thresholds are computed annually according to the calendar year. Once filed, a complete calendar year needs to be covered by a company in order to stop filing these returns. For example, if a company exceeds the threshold in March 2022 on arrivals, Intrastat returns for arrivals are due until December 2023. These thresholds are calculated according to the invoice value. The authorities monitor the thresholds and often send letters to each taxpayer requiring them to file missing Intrastat return.

Have a look at our overview of Intrastat thresholds.

Also, you can find here the official information about Intrastat thresholds in Ireland.

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Reporting of Specific Scenarios in Ireland

Very often, the transactions reported in the Intrastat return are standard sales from one taxable person to another. However, a number of scenarios have specific reporting requirements.

Appendix 8 of the Intrastat traders manual contains the full list of transaction codes for Intrastat in Ireland.

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Nil and Corrective Intrastat Returns in Ireland

If no transactions are to be reported, a nil Intrastat return must be filed.

Concerning correcting Intrastat returns, according to the official Intrastat guide, in case understated or overstated the value of intra-Community transactions subject to Intrastat reporting by 5% or more in an individual INTRASTAT monthly declaration, taxpayers must immediately notify the VIMA unit.

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Intrastat Penalties in Ireland

Taxpayers not submitting Intrastat returns are subject to prosecution.