VAT rate in Ireland back to normal in March 2021

The previously reduced VAT rate in Ireland will be back to normal starting 1 March 2021.

Ireland reinstates normal VAT rate in March 2021

Many countries provided Covid-19 relief for taxpayers in light of difficulties caused by the pandemic. Germany reduced its typical VAT rate in July 2020 but put it back to normal in January 2021. Ireland also followed suit with a reduced VAT rate effective from September 2020. This temporary reduction will end as of 1 March 2021, and taxpayers should take this into account when applying VAT on their sales and for preparing future VAT returns.

Irish VAT rates

During the relief period, the Irish tax authorities reduced the VAT rate from 23% to 21%. Taxpayers should keep in mind that the normal 23% VAT rate will apply as from 1 March 2021 and were encouraged to take care of any outstanding invoice issues by 28 February.

Make sure you’re using the correct VAT rates

Using the appropriate VAT rates on your transactions is crucial in order to report sales and VAT correctly to the relevant tax authorities.

When VAT rates change, there are some areas of risk that you should take into account. Advanced payments, continuous supplies, or credit notes often trigger questions about the correct VAT rate to be used on your invoice. Marosa can help you ensure that your invoices are issued correctly according to local tax point rules. We will also help you to make sure you are declaring and paying the right amount of VAT.

When incorrect VAT rates are used, the risk of penalties and fines are increased substantially. Check out our comprehensive guide on VAT rates throughout the EU for more information.


Not sure which VAT rate to use or have concerns about this change? Get in touch with a tax advisor today to assess your needs and to find out more about how we can help.


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