Once registered for VAT in Ireland, businesses are assigned a unique VAT number that’s included in all VAT-related documentation and communication. This number not only validates a business as a registered trader but also instils confidence in business relationships by indicating compliance with Irish tax obligations. Keeping up-to-date with VAT regulations and maintaining accurate records is a critical part of managing a business’s VAT affairs effectively.

Need help with VAT? See our VAT services page or contact us.

Who Needs a VAT Number in Ireland

In Ireland, obtaining a VAT (Value-Added Tax) number is an important step for businesses engaging in taxable goods and services. Who is required to register, though?

• Sole traders, partnerships, and companies involved in supply of goods or services that exceed or are likely to exceed the VAT thresholds are obliged to register for VAT.
• The VAT registration thresholds are distinct based on the type of business. For instance, a threshold of €40,000 applies to businesses providing services, whereas a threshold of €80,000 applies to those supplying goods.
• It is mandatory for non-EU businesses trading in Ireland to register for VAT, irrespective of the turnover.
• Foreign businesses that engage in taxable supplies within Ireland but lack an establishment in the state also need to secure a VAT number.

Registering for VAT in Ireland is not exclusively tied to surpassing these thresholds. Voluntary registration is possible for businesses that have not reached these limits if they discern a benefit in being VAT-registered, such as reclaiming VAT on business expenses.

Remember, if a business carries out only VAT-exempt activities, it should not register for VAT. Moreover, holding a VAT number comes with administrative responsibilities, such as filing VAT returns and maintaining VAT records, which you should consider before registering voluntarily.

When You Need to Register for VAT

In Ireland, the requirement to register for VAT (Value-Added Tax) is contingent upon specific conditions related to your business activities. Here’s what determines the necessity to register:

Thresholds: A business must register for VAT if its annual turnover exceeds or is likely to exceed the following thresholds:

• €80,000 for the sale of goods
• €40,000 for the supply of services

Voluntary Registration: Even if a business doesn’t exceed these thresholds, it can opt to register voluntarily. This might be done to reclaim VAT on start-up costs or to present the business as a VAT-registered entity, which can be appealing to other businesses.

Accountable Persons: An individual is considered an ‘accountable person’ if they are supplying goods or services and are an independent entity. If their turnover is under the thresholds but they still supply taxable goods or services, they may need to register.

Other Criteria: Below are some instances which might necessitate registration, irrespective of the threshold:

1. If a business is not established in Ireland but supplies goods or services to the country, they need to register for VAT.
2. If an individual receives services from abroad for business purposes, they may need to register and account for VAT (reverse-charge).

Different rules may apply in specific situations, such as when dealing with property transactions or if you’re a non-resident supplier without an establishment in Ireland. It’s advisable to consult with Revenue, your accountant or a tax advisor for tailored VAT guidance.

What You Need to Register for VAT in Ireland

To register for VAT in Ireland, a business must be established within the state. The process begins with the Revenue Online Service (ROS), where you can submit the necessary forms.

For Individuals and Sole Traders:

• They should complete the TR1 form.
• A Personal Public Service (PPS) number or Identified Person Number (IPN) is required.

For Companies:

• The appropriate form is TR2.
• A company will file with its Tax Registration Number (TRN).

General Requirements:

• Proof of business establishment in Ireland.
• Valid email address to create a ROS account.
• Information about the business activity, including the expected turnover, to justify the need for VAT registration.

Registration Steps:

1. Create a ROS account, if not already done.
2. Fill in the correct registration form (TR1 or TR2), depending on the business structure.
3. Submit the form electronically via the ROS system.
4. Await confirmation; the local tax district office will indicate when the VAT registration takes effect.

Monthly Obligations Post-Registration:

• A VAT-registered entity must compliantly file VAT returns bi-monthly.

What you should know before you apply for a VAT number

When registering for a Value-Added Tax (VAT) number in Ireland, one must be aware of specific prerequisites and conditions that determine the eligibility and need for VAT registration.

• Necessity of VAT Registration: A business must have a concrete reason that necessitates a VAT number. This usually pertains to the type of business, its annual turnover, or trade within and outside of Ireland.
• Type of Business: The business should be carrying out taxable supplies of goods or services, or receiving services from abroad for which it must account for Irish VAT.
• Establishment: To apply for VAT registration, a business must be established within the state or carrying out taxable supplies in Ireland.

Before the initiation of the application, you must collate several key documents:

1. Proof of identity (Personal or Business)
2. Proof of business establishment in Ireland
3. Details about the nature of the business and its trading activities
4. Projected turnover figures to determine the VAT threshold applicability

You should also familiarize yourself with the various categories of VAT registration as they pertain to different business structures and specialisms, such as farmers, non-established traders, and state bodies. Each category might involve additional specific requirements or documents.

Since the application involves fiscal responsibilities, accuracy and thoroughness in completing registration forms and supplying necessary documentation are crucial. Being well-informed and prepared can streamline the process, leading to a smoother VAT registration experience.

Reasons Why Your VAT Application Might be Rejected

Several reasons could lead to the rejection of an application for a VAT number in Ireland. The applicant should know these common pitfalls to ensure a smoother registration process.

• Lack of Economic Activity: If the Revenue Commissioners (ROS) are not satisfied that genuine economic activity is being carried out, the VAT application may be declined.
• Presence of Employees: A business without employees in Ireland can signal a lack of substantial economic presence, leading to possible rejection.
• Irish Customer Base: Companies must demonstrate they have or intend to have customers in Ireland. Failure to do so may result in a rejected application.

An applicant should also be mindful of the following:

• Incomplete Documentation: All required documents must be accurately completed and provided. Missing or incorrect information can delay or invalidate the application.
• Timing of the Application: If the application is submitted outside of the taxable period or does not accurately predict the start of economic activity, it may be rejected.
• Business’s Legal Status: The legal structure of a business can affect its eligibility for a VAT number.

Lastly, communication with the relevant authorities is crucial. If the Revenue rejects an application, substantiating the business’s activities with additional documentation or clarifying any misunderstandings may remedy the situation. Rejection is not the end, and persistence in addressing the Revenue’s concerns is recommended.

How long before I get my VAT number?

After a business submits its registration form to acquire a VAT number in Ireland, the waiting period is typically about 7-10 working days. However, they should be aware that this is an average timeframe, and the process could be shorter or longer depending on a few factors:

• The volume of applications the Revenue Office is currently handling.
• Any additional queries or clarifications required by the Revenue regarding the application.

If a business requires VAT registration for dealing with intra-EU transactions, opting for the ‘intra-EU’ VAT registration may streamline the process. In contrast, a ‘domestic-only’ registration suffices for companies trading solely within Ireland, which could potentially expedite the registration thanks to the Two-Tier VAT registration system implemented since June 2019.

Businesses must note that while the wait time for the VAT number can vary, its effectiveness starts from the date mentioned on the registration form. Under specific circumstances, it can be backdated with an agreement from the Revenue Office. The effective date, however, will not precede the start of the taxable period in which the application was made for businesses that elect to register.

In summary, businesses should plan for a minimum wait of one to two weeks but also prepare for potential delays. If the process takes longer than the anticipated period, it is recommended that businesses stay in touch with the revenue office for updates.

Applied for a VAT number – what’s next?

After an individual or business applies for a VAT number in Ireland, there is a standard wait for processing. If required, the Revenue Commissioners will review the application and supporting documentation. The duration of this review can vary, but applicants can typically expect a response within 14 to 28 days.

During this waiting period, it’s important to monitor your emails and post for any correspondence from Revenue. They may request additional information to support your application. Prompt responses to such inquiries can help avoid unnecessary delays.

Once Registered:

• The applicant will receive a VAT number from Revenue.
• They should start issuing VAT invoices with their VAT number.
• They must charge VAT at the appropriate rates on their taxable sales.

Ongoing Obligations:

• File VAT Returns: Regularly, according to the periods assigned by Revenue, which could be bi-monthly, quarterly, or annually.
• Record Keeping: Maintain accurate and up-to-date records of all VAT-related transactions.

Note: Even if the applicant has no VAT to pay or reclaim, they must still file a return.

Helpful Reminders:

• Sign up for eReminder notifications through ROS to keep track of VAT return deadlines.
• Consider using the Direct Debit scheme for ease of payments.

Applicants should also be aware that once they receive their VAT number, Revenue will check their compliance. Hence, maintaining transparency and accuracy in VAT-related affairs is crucial.

Benefits of VAT Registration

Registering for VAT (Value-Added Tax) in Ireland offers several advantages for small and large businesses. One of the fundamental benefits is the professional image it provides. When a company is VAT registered, it can foster a sense of trust and credibility with suppliers and clients. They often perceive the business as financially stable and well-established, which can be particularly beneficial for new businesses trying to establish themselves in the market.

A VAT-registered business can also reclaim the VAT they’ve paid on goods and services purchased for their business. This can include everything from office supplies to business-related equipment. However, remember that you can only reclaim VAT if it directly relates to the sale of your own VAT-taxable goods and services.

Here are the key benefits outlined:

• Credibility: Businesses are often perceived as more reputable if VAT registered.
• VAT Reclaim: Businesses can deduct the VAT paid on eligible business expenses from the VAT they charge to customers.
• Pricing Strategy: VAT registration allows for more flexible pricing strategies. Prices can be set to reflect VAT inclusion, which might appeal more to B2B transactions.
• Access to VAT Refunds: Certain businesses, especially export-oriented ones, might be eligible for VAT refunds, leading to potential savings.

Small businesses also have a special scheme called the VAT Cash Accounting Scheme. This scheme allows them to account for VAT based on cash received and paid, which can help with cash flow management.

VAT Rates in Ireland

The standard Value-Added Tax (VAT) rate is 23% as of current records. This applies to most goods and services, ensuring consumers understand the likely charge added to their purchases. However, certain items benefit from special VAT treatment under Irish tax law, such as reduced rates and zero rates.

The reduced VAT rates are segmented as follows:

• 13.5%: This rate covers items such as fuel, electricity, certain construction services, and veterinary fees.
• 9%: A special reduced rate for tourist-related activities and certain publications.
• 4.8%: This rate is specifically for agriculture and livestock.

Furthermore, a 0% rate applies to essential goods and services. Below is a list of items that fall under this category:

• Books and educational materials
• Children’s clothing
• Food and drink (excluding alcohol, sweets, and certain beverages)

Businesses must recognise which VAT rate applies to their products or services. Compliance with the correct VAT rate is essential—any error can result in legal issues and financial penalties.

Businesses must charge the identified VAT rate and remit it to the Revenue Commissioners. The process of VAT collection and remittance forms an integral aspect of the Irish fiscal landscape, supporting public expenditure and services.

Recording VAT

Once a business is registered for VAT in Ireland, they must maintain accurate records of all VAT-related transactions. These records are the foundation for completing VAT returns, which must be submitted to the Revenue Commissioners.

VAT Sales and Purchases:

• Sales Invoices: Businesses should record all sales invoices issued, ensuring that each includes the VAT rate applied and the total VAT amount charged.
• Purchase Invoices: For purchases, all supplier invoices should be kept on file with clear indications of the VAT paid.

VAT Account: A VAT account is a summary of the VAT due on sales (output VAT) and the VAT reclaimable on purchases (input VAT). Businesses should:

• Clearly separate the output and input VAT in their records.
• Regularly update their VAT account to reflect current transactions.

Record Keeping:

• All records must be kept for at least 6 years.
• Maintain digital or physical copies of all VAT invoices and receipts.
• Ensure that all records are easily accessible for potential audits.

Documentation:

• VAT Return Forms: Businesses must periodically complete VAT3 return forms, summarising their output and input VAT.
• Electronic Records: Businesses can use Revenues’ Online Service (ROS) to manage VAT records and submit returns electronically.

Value Added Tax (VAT) is critical for small businesses. It is a consumption tax levied on the value added to goods and services at each stage of production and distribution. In Ireland, VAT is charged on most goods and services registered businesses provide. The responsibility of understanding and adhering to VAT regulations falls upon these businesses, making it essential for small business owners to be well-informed about their VAT obligations to ensure compliance with the law.

Small businesses need to consider several specific factors when dealing with VAT. These include the process of registration, calculating and paying VAT, as well as understanding the specific rates that apply to different types of goods and services. VAT registration is mandatory for businesses that exceed or are likely to exceed the prescribed annual turnover thresholds, which currently stand at €80,000 for the supply of goods and €40,000 for the supply of services. However, it’s important to note that these amounts are subject to change and businesses should refer to the latest figures from Revenue, the Irish Tax and Customs authority.

In addition to managing VAT payments and returns, small business owners can reclaim VAT paid on business expenses, provided the expenses were incurred for VATable business activities. Being familiar with VAT legislation, particularly the Value-Added Tax Consolidation Act 2010, is advantageous for small businesses seeking to maintain compliance and optimise their tax position. This highlights the importance of maintaining accurate records and keeping abreast of any changes in VAT regulations that may affect their operations.

Understanding VAT

Value added tax (VAT) applies to the sale of goods and services within Ireland, influencing both businesses and consumers. It’s a critical financial element that small business owners must manage effectively to ensure compliance with Irish tax laws.

Basics of VAT

VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. The amount of VAT that the user pays is on the cost of the product, less any of the costs of materials used in the product that have already been taxed.

Taxable Supplies: The term refers to all goods and services subject to VAT at various rates, including the standard, reduced, or zero rate. Businesses must know which category their products or services fall under to charge VAT correctly.

Exempt Supplies: Certain goods and services are exempt from VAT in Ireland. This means that no tax is applied to their sale, and the supplier does not charge VAT to the customer. However, it’s important to note that exempt status also means the supplier cannot reclaim VAT on business purchases.

VAT Rates and Thresholds

The standard VAT rate is 23%, applicable to most goods and services. However, there exist reduced rates of 13.5% for items such as building and construction services, and 9% for other categories including hospitality services.

Zero-Rate: Not to be confused with exempt supplies, zero-rated goods and services are taxable but at a rate of 0%. Zero-rating applies to certain items such as books and children’s clothing.

Turnover Threshold: For a small business, registration for VAT is mandatory when the turnover exceeds or is likely to exceed €80,000 for the supply of goods or €40,000 for the supply of services within 12 months. There are also special rules for non-EU businesses and deemed suppliers that provide digital services to consumers in Ireland.

Businesses within the EU that supply taxable goods or services to Ireland might also need to register for VAT. Small business owners need to familiarise themselves with the various VAT thresholds to ensure compliance.

VAT Registration Process

The VAT registration process involves understanding when to register, navigating the registration procedures, and completing necessary documentation, such as the TR1 form, to obtain a registration number.

When to Register

A business must register for VAT with the Irish Revenue Commissioners if its turnover exceeds or is likely to exceed the turnover thresholds, which are €80,000 for the sale of goods or €40,000 for the provision of services. Additionally, if a business is based outside the European Union but provides goods or services to Irish customers, it must also register for VAT.

Registration Procedures

The standard procedure for VAT registration is to apply online through the Revenue Online Service (ROS). Once a business has determined it needs to register, the owner or a tax agent must complete the online registration process. During this process, businesses established within the EU must provide evidence of trading activities in their respective EU member states. For VAT registration, information such as the business’s name, address, and details of trading activities are required.

TR1 Form and Registration Number

To register for VAT, the TR1 form must be completed. This form is for individuals, sole traders, trusts, and partnerships. Companies should complete the TR2 form. Upon registration approval, the Revenue Commissioners will issue a VAT registration number, which the business must use when trading and on all VAT-related documentation.

Businesses should maintain accurate records to support their VAT registration and to remain compliant with the regulations set by the Irish Revenue.

Managing VAT Returns and Payments

Managing Value-Added Tax (VAT) returns and payments efficiently is essential for small businesses to remain compliant with tax regulations. Accurate record-keeping and meeting deadlines are crucial for preparing VAT returns, processing payments, and avoiding penalties.

Preparing VAT Returns

Small businesses must prepare VAT returns bi-monthly, summarising the VAT they have charged on sales and the VAT they have incurred on purchases, known as input VAT. To accurately prepare VAT returns, they need to ensure:

• Invoices: All sales and purchase invoices should be VAT-compliant and include the necessary details, such as the VAT rate and amount.
• Record-keeping: Maintain meticulous records of all taxable supplies and inputs to support VAT return entries.

Payment Procedures

Once the VAT return is prepared, the Revenue Commissioners must be paid the net VAT due. This is the difference between the VAT charged on sales and the VAT reclaimed on purchases. Payments are typically made through:

• ROS (Revenue Online Service): This platform allows businesses to file returns and make payments online, which is the preferred method by the Revenue.
• Direct Debit: Businesses can make payments by setting up a direct debit mandate with Revenue.

Deadlines and Penalties

Compliance with submission and payment deadlines is non-negotiable. Small businesses should take note of the following:

• Deadlines: VAT returns and payments are generally due by the 19th of the month following the end of the bi-monthly period.
• Penalties: Late submission or payment can result in penalties and interest charges. Continuous non-compliance could lead to more significant legal consequences.

Businesses are advised to consult with an accountant or a VAT specialist to ensure accurate and timely compliance with the VAT regulations set forth by the Revenue Commissioners.

Special VAT Schemes and Reliefs

Special VAT schemes and reliefs provide various benefits for small businesses in Ireland, catering to different sectors and circumstances, including international trade, relief programmes, and digital services. Ask your accountant for specific advice.

VAT on International Trade

Exports and acquisitions from other EU countries are generally involved in special VAT schemes. For instance, businesses can benefit from the zero-rated VAT on goods exported to non-EU countries, thereby not charging VAT on these sales. However, they should maintain records to substantiate these exports. Regarding imports, businesses must pay VAT but can often reclaim that VAT as input tax.

VAT Relief Programs

Numerous VAT relief programs apply to goods and services in certain categories. Examples include education, which offers a reduced or zero VAT rate, and children’s clothing, which is typically zero-rated. These reliefs aim to reduce the tax burden on essential services and goods for the populace. Small businesses in these sectors must apply the correct rate and maintain detailed records to ensure compliance.

VAT on E-Services

The VAT rules for cross-border e-services have evolved with the introduction of the VAT Directive changes effective from 1 July 2021. For e-commerce activities, businesses can opt in for schemes such as the VAT Mini One Stop Shop (MOSS) or its extension, the OSS (One Stop Shop), simplifying VAT obligations across EU borders. This is particularly relevant for businesses involved in mail-order or digital services across the EU, where VAT is chargeable at the rate prevailing in the consumer’s country.

VAT Record Keeping and Inspections

For small businesses, maintaining accurate records of VAT transactions is critical for compliance, and understanding the Revenue’s powers to inspect those records is essential. These effective practices ensure accountability and the proper application of VAT regulations.

VAT Records and Books

Small businesses must keep full and true records of all VAT-related transactions to determine the correct VAT amount payable or refundable. Books and records to maintain should include:

• Invoices and receipts: These document sales and purchases, showing VAT charged and paid.
• Credit and debit notes: Essential for documenting refunds, discounts, or changes to sales transactions.
• Cash register tally rolls and accounts: They provide a daily summary of transactions.
• Regular VAT Return forms: These summarise VAT due over a specific filing period.

Accounting software, like Xero, that aligns with Irish VAT regulations can streamline this process, ensuring all transactions record the correct VAT rate and comply with the Revenue Commissioners’ guidelines.

Revenue Inspections and Compliance

The Revenue Commissioners have the authority to inspect any business’s VAT records to ensure compliance with VAT regulations. To facilitate this process, businesses must:

• Retain paper records within Ireland unless Revenue explicitly permits to do otherwise.
• Store electronic records in line with the electronic invoicing rules.
• Provide access to books and records upon request for inspection, which can ascertain issues such as incorrect application of VAT rates, inaccurate recording of bad debts, or erroneous calculation of discounts or refunds.

Small businesses must adhere to these regulatory requirements to avoid penalties and ensure that VAT is accounted for correctly in all business operations.

Frequently Asked Questions

This section addresses common inquiries about VAT regulations pertinent to small businesses in Ireland, offering clarity on thresholds, exemptions, and benefits.

What are the current VAT registration thresholds for sole traders in Ireland?

The current VAT registration thresholds in Ireland for sole traders are €40,000 for the supply of services and €80,000 for the supply of goods. Sole traders should register for VAT once their annual turnover exceeds these limits.

Which services are exempt from VAT?

In Ireland, various services are exempt from VAT, including most medical, dental, and educational services and financial, insurance, and certain property transactions.

Is VAT registration mandatory for my small business?

VAT registration is mandatory for small businesses once the annual turnover exceeds the specified thresholds of €40,000 for services and €80,000 for goods.

What advantages does VAT registration offer to Irish small businesses?

VAT registration allows Irish small businesses to reclaim VAT on business expenses, conferring a price advantage and improving cash flow. Moreover, being VAT registered can enhance the business’s credibility among clients and suppliers.

Is it permissible to operate multiple businesses to stay below the VAT threshold?

Operating multiple businesses solely intending to stay below the VAT threshold is not permissible. The same person’s total turnover of all business activities must be considered for VAT registration purposes.

Introduction:

Value Added Tax (VAT) is a crucial aspect of financial management for businesses in Ireland. Understanding and correctly managing VAT is not only a legal requirement but also an essential part of running a successful enterprise. In this comprehensive guide, we will demystify VAT for Irish businesses, providing a clear understanding of the tax, its implications, and practical tips for compliance.

Understanding VAT:

Value Added Tax, or VAT, is a consumption tax levied on the value added at each stage of the production and distribution of goods and services. VAT is collected by businesses on behalf of the government, and it’s ultimately paid by the end consumer.

VAT Rates in Ireland:

Ireland has multiple VAT rates:

• Standard Rate (23%): This is the most common VAT rate and applies to most goods and services.
• Reduced Rate (13.5%): This rate is applied to certain goods and services, including hospitality, tourism, and home renovations.
• Zero Rate (0%): This rate is applied to specific goods and services, including food, books, and certain exports.

VAT Registration:

Businesses exceeding specific turnover thresholds must register for VAT. Once registered, businesses are required to charge VAT on their sales and report these transactions to the tax authorities. Additionally, they can claim back VAT on eligible business expenses.

VAT Returns and Payments:

Registered businesses must file periodic VAT returns, typically every two months, with the Revenue Commissioners. These returns outline the VAT collected on sales and the VAT paid on expenses. The difference is either remitted to or refunded by the tax authority.

VAT Compliance Tips:

• Accurate Record-Keeping: Maintain meticulous records of all VAT transactions, including invoices and receipts. Proper documentation is crucial for audits and VAT returns.
• Timely Filing: Ensure that VAT returns are filed and payments made on time to avoid penalties and interest charges.
• Consult a Professional: VAT compliance can be complex, especially for international transactions or specialized industries. Consulting with an accountant experienced in VAT can help businesses navigate intricacies.
• Claiming Input VAT: Identify all eligible business expenses for which you can claim back input VAT. This can significantly reduce your overall VAT liability.
• VAT Compliance for E-commerce: If your business is involved in e-commerce, be aware of the VAT obligations, especially with regard to cross-border sales within the EU.
• Regular Review: Periodically review your VAT processes and procedures to ensure they remain aligned with current regulations.

Conclusion:

Demystifying VAT is essential for Irish businesses to maintain compliance and financial health. VAT can be complex, but with a clear understanding of the basics and a commitment to accurate record-keeping and compliance, businesses can navigate the world of VAT successfully.

For many businesses, working with experienced accountants, such as the team at Coffey&Co, who specialize in VAT can be a valuable investment. We can provide guidance, help with accurate VAT returns, and ensure that your business stays on the right side of the tax authorities. With a proactive approach to VAT management, Irish businesses can thrive in a dynamic and competitive market.

Filing VAT returns can be a struggle for some businesses, especially startups. It’s important to ensure you’re compliant with the Revenue’s requirements with regards to VAT returns. Mistakes can be costly, so your first point of focus should be to understand your VAT obligations.

This article will cover VAT returns and guide you on how to file your returns correctly.

What is VAT?

Value Added Tax (VAT) is a tax charged on goods and services sold within Ireland. Manufacturers, wholesalers, and retailers collect VAT from final consumers and remit it to Revenue.

The current standard VAT rate in Ireland is 23%. You can find specific VAT charged on various goods here and for the supply of services on this link.

How Often Are You Required to File VAT Returns?

For taxpayers with a yearly VAT liability of below €3,000, you can file your VAT returns bi-annually. If you are a trader with annual liabilities between €3,000 and €14,400, you’ll be expected to file your VAT returns every four months. 

However, you can make a request to file your VAT returns once a year under specific circumstances. 

You should file electronic VAT returns within 23 days of the end of the bi-monthly VAT period. Manual returns should be filed by the 19th of the month following the taxable period. But only VAT-registered taxpayers who lack the competence to file their returns electronically are allowed manual filing. The standard is mandatory e-filing.

Irish VAT Penalties

You can get penalized for failing to comply with VAT return obligations. 

Revenue charges a standard penalty of €4,000 if you fail to:

• Register your business for VAT
• Comply with invoicing requirements
• Meet VAT returns deadlines
• Maintain proper books and records

Additionally, you can get charged interest if you pay your VAT late. The interest rate is 0.0274% per day on unpaid sums.

Tips to Ensure You Are VAT Tax Compliant

So, how can you ensure that you meet your VAT obligations? Here are a few tips that you’ll find useful:

• VAT Registration: Always ensure that you understand your VAT registration thresholds and register as soon as you exceed them. It’s advisable to register for VAT when setting up your business so you may be able to claim VAT on set-up costs.
• Filing VAT Returns: Revenue doesn’t require you to submit supporting invoices when filing VAT returns. But they can raise queries on the voices. Always retain your invoices for up to six years (the required time period), ensure every supplier’s invoice is valid, and respond to queries from Revenue as soon as you can.
• Other Tax Obligations: You should also ensure that you file annual returns of trading details. Additionally, you should file Intrastat and VIES returns if you do cross-border EU transactions.
• Revenue Authorizations: Always monitor the expiry of relevant authorizations issued by Revenue and apply for renewal in good time. If your business no longer qualifies for an authorization, ensure that you inform Revenue before a penalty is imposed on your business.

VAT returns can be quite complicated. It’s advisable to get professional VAT tax advice from qualified accountants. 

We Can Help You With Your VAT Returns

We are VAT returns experts.  

We can help you in filing your returns the right way. Coffey & Co. has been in the industry for more than a decade and has helped many Irish businesses to file their VAT returns. We have assisted both domestic and international companies in Ireland.

Let’s chat about your VAT returns.