How to Charge VAT in Ireland and Across Borders

How to Charge VAT in Ireland and Across Borders- EU or Rest of World?

Value Address Tax is a tax charged, collected, and paid to Revenue Authorities It is levied on chargeable Goods or services sold to customers. Similarly, VAT paid on those products can be claimed against what is owed to the authorities. In this article we shall examine VAT on good or services in Ireland, EU and other Countries.

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Who is needed to register for VAT in Ireland?

According to Revenue, generally, you must register for VAT if you are an accountable person. A trader who makes taxable supplies of goods and services in Ireland can elect to register for Irish VAT, but VAT registration is compulsory if the value of a trader’s taxable supplies exceed certain thresholds during a continuous 12-month period. This threshold is 37,500 Euros a year for Services and 75,000 Euros of Sales per annum for products.

If you think you need to register for VAT, talk to a member of our team today for help getting started.

Here are some steps to charge VAT in Ireland:

1. Register for VAT with Revenue.

2. Determine the VAT rate that applies to your goods or services.

3. Charge VAT on your goods or services at the appropriate rate.

4. Keep accurate records of all VAT charged and paid.

5. Submit a VAT return to Revenue every two months.

CAN BUSINESS OWNER PREPARE VAT RETURN HIMSELF AND FILE TO REVENUE IN IRELAND?

Yes, a business owner in Ireland can prepare their own VAT return and file it with the Revenue Commissioners (Revenue). However, it is important to note that there are certain requirements and rules that must be followed when preparing and submitting VAT returns.

Firstly, the business owner must be registered for VAT with Revenue. They must also keep accurate records of all their transactions, including sales, purchases, and expenses. These records should be kept up to date and accurate, as they will form the basis of the VAT return.

When preparing the VAT return, the business owner must calculate the VAT due on their sales and deduct any VAT they have paid on purchases and expenses. The net amount is then submitted to Revenue, along with any payment due.

The return can be completed as follows:

T1 – VAT on sales.
This figure is the total VAT due on your supplies of goods and services.
T2 – VAT on purchases.

VAT Rates:

VAT Rates that are applicable are based on product or service you are selling, where it is being delivered or rendered. For more information on what Rates to charge, please refer to Revenue’s VAT rate database.

Timing:

VAT deadline is by the 23rd day of the month following the end of each taxable period- Usually 2 Monthly Period.

Ultimately, while a business owner can prepare and file their own VAT return in Ireland, it is important that they have a good understanding of the VAT rules and regulations to ensure compliance with Revenue requirements.

Also, it should be noted that VAT can be a complex area and may be beneficial for business owners to seek the advice of a qualified accountant or VAT specialist.

Selling Goods to Other Countries:

If you are selling goods or services to other EU Countries, it is called intra EU Supply.

If you are selling goods to businesses in other EU countries, you may also need to be registered for VAT in those countries if you exceed the distance selling threshold. This threshold varies from country to country, but it is generally around €35,000 per year. If you exceed this threshold, you will need to register for VAT in the country of your customer and charge the local VAT rate.

When selling goods to other EU businesses, you may be able to zero-rate the sale of goods if the customer provides you with a valid VAT number. This means that you do not charge VAT on the sale, but the customer will be responsible for accounting for the VAT in their own country. However, it is important to ensure that the VAT number is valid and that the conditions for zero-rating are met.

It is also worth noting that there are additional requirements when selling goods to businesses outside of the EU. If you are exporting goods to non-EU countries, you may need to obtain an export license and comply with other export regulations.

Overall, it is important to have a good understanding of the VAT rules and regulations when selling goods to other businesses in Ireland and other EU countries.