Ireland VAT (Value Added Tax) Guide for Businesses: Rates, Registration & Compliance

Ireland VAT (Value Added Tax)

Ireland implements a Value Added Tax (VAT) system that complies with European Union regulations but also features national specifics. Known locally as VAT, this tax applies to most goods and services supplied in Ireland.

Whether you run a business inside Ireland or trade cross-border, understanding the Irish VAT framework is essential for compliance and smooth operations.

🔍 What is VAT in Ireland?

VAT is a consumption tax applied on goods and services at each stage of production and distribution. Although businesses charge VAT to customers, the final cost is borne by the end consumer.

The Irish Revenue Commissioners oversee VAT administration, ensuring alignment with EU VAT directives.

📊 Ireland VAT Rates

Ireland applies several VAT rates depending on the type of goods or services supplied:

Standard Rate: 23%

Applies to most goods and services, including electronics, vehicles, and professional services.

Reduced Rate: 13.5%

Used mainly for passenger transport, building works, and some hospitality services.

Lower Reduced Rate: 9%

Applies to tourism-related services like hotels, restaurants, and cultural events.

Zero Rate: 0%

Applies to certain goods including food, children’s clothing, and medicine.

📝 Who Must Register for VAT in Ireland?

Irish Businesses:

Required to register if annual turnover exceeds €37,500 for services or €75,000 for goods.

Foreign Businesses:

Must register if they supply taxable goods or services in Ireland or distance sell to Irish consumers exceeding the EU-wide threshold (€10,000).

Voluntary Registration:

Small businesses below thresholds can register voluntarily to reclaim input VAT.

🔢 Ireland VAT Number Format

VAT numbers start with the prefix “IE” followed by 7 or 8 digits and sometimes a letter suffix.

• Example: IE1234567X

This number must appear on all invoices and VAT returns.

🧾 VAT Invoice Requirements

Valid invoices must include:

• Invoice number and date
• Supplier and customer names and addresses
• Supplier’s VAT number
• Description of goods/services
• Net amount, VAT rate, VAT amount
• Total payable
• Delivery date (if different)
• Buyer’s VAT number for B2B intra-EU sales

Electronic invoicing is accepted.

💡 Example VAT Calculation

If you sell a service worth €1,000 with 23% VAT:

• VAT = €230
• Total invoice = €1,230

The seller collects €1,230 and remits €230 VAT to Revenue.

🗓️ VAT Filing and Payment

• Filing frequency depends on turnover (monthly, bi-monthly, or quarterly).
• VAT returns are filed electronically via Revenue Online Service (ROS).
• Payment and filing deadlines must be strictly followed to avoid penalties.

🌍 Cross-Border VAT Rules

• Intra-EU B2B: Zero-rated sales with valid VAT numbers, reported on EC Sales List.
• Intra-EU B2C: Distance sales exceeding €10,000 require VAT registration or OSS use.
• Imports: Subject to import VAT, refundable if registered.
• Exports: Zero-rated with valid export documentation.

❌ VAT-Exempt Supplies

Includes financial services, insurance, education, healthcare, and some property transactions. Businesses dealing exclusively in exempt supplies cannot reclaim input VAT.

🌐 VAT Refunds for Foreign Businesses

• EU businesses apply through their home country VAT refund portal.
• Non-EU businesses submit refund claims directly to Irish tax authorities, often needing a fiscal representative.

✅ Compliance Tips for Ireland VAT

• Register promptly if thresholds are exceeded
• Issue compliant VAT invoices
• Submit returns and payments on time
• Keep detailed VAT records for 6 years
• Verify EU VAT numbers using VIES
• Use OSS for EU-wide distance sales

📌 Summary

Ireland’s VAT system is straightforward but requires careful attention to registration thresholds and filing deadlines. Staying compliant ensures your business operates smoothly and avoids costly fines.

Use our Ireland VAT calculator for easy tax calculations tailored to Irish rates.