VAT in Ireland

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. Special rules can be checked in the official guide about Services Conferences.
  • 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). Special rules can be checked in the official manual Partial recover of VAT on qualifying passenger motor vehicles.
  • 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.

 Check the official information from the Irish tax website on VAT deduction limits. Also, the VAT deduction limits are regulated in Section 60 and following of the Irish VAT Act.

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

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. Also, this is regulated in Section 74 of the Irish VAT Law.

Find also here the rules for services taxable at the rate of the goods

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