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VAT Ireland: A Comprehensive Guide

In Ireland, Value Added Tax (VAT) is a consumption tax that applies to the sale of goods and services. Understanding VAT is crucial for businesses operating in Ireland, as it affects pricing, compliance, and financial reporting. This guide provides an overview of VAT in Ireland, including rates, registration, compliance, and recent updates.

Introduction to VAT in Ireland

VAT is a tax levied on the value added at each stage of production and distribution. It is ultimately borne by the final consumer but collected and remitted by businesses to the government. In Ireland, VAT is governed by the Value-Added Tax Consolidation Act 2010 and administered by the Revenue Commissioners.

Understanding VAT Rates in Ireland

Standard Rate

The standard VAT rate in Ireland is currently 23%. This applies to most goods and services, including imports, unless they qualify for a reduced rate or exemption.

Reduced Rate

Certain goods and services are subject to a reduced VAT rate of 13.5%. This includes items such as certain types of food, hospitality services, and newspapers.

Zero Rate

Some goods and services are zero-rated for VAT purposes, meaning VAT is charged at 0%. Examples include basic foodstuffs, exports outside the EU, and certain medical supplies.

VAT Registration in Ireland

Threshold for Registration

Businesses must register for VAT in Ireland if their annual turnover exceeds or is likely to exceed €75,000 for the supply of goods or €37,500 for the provision of services.

Voluntary Registration

Even if turnover is below the threshold, businesses may choose to register voluntarily for VAT. This can be advantageous for reclaiming VAT on expenses and presenting a professional image to customers.

VAT Returns and Payments

Frequency of Returns

Registered businesses typically file VAT returns on a bi-monthly basis, although some may qualify for quarterly or annual filing depending on their turnover and compliance history.

Due Dates

VAT returns are due by the 23rd day of the month following the end of the return period. Payments are also due by this date, whether filed online or through paper returns.

VAT Compliance and Record Keeping

Invoicing Requirements

Businesses must issue VAT-compliant invoices for all taxable supplies. This includes specific information such as VAT registration numbers, amounts, and tax rates.

Record Retention

Records related to VAT must be retained for a minimum of six years. This includes invoices, receipts, bank statements, and other relevant documents.

VAT on Imports and Exports

Import VAT

Goods imported into Ireland from outside the EU are subject to VAT at the point of entry. Importers may reclaim this VAT if they are registered for VAT and the goods are for business use.

Exports and VAT Refunds

Exports from Ireland to destinations outside the EU are generally zero-rated for VAT. Exporters can claim refunds of VAT paid on inputs related to the exported goods or services.

Special VAT Schemes in Ireland

Cash Accounting Scheme

Under this scheme, businesses account for VAT on the basis of payments received and made, rather than on invoices issued and received. This can help with cash flow management.

Flat Rate Scheme

This scheme allows certain eligible businesses to apply a flat rate percentage to their turnover, simplifying VAT calculations and potentially reducing administrative burden.

VAT Penalties and Enforcement

Late Filing Penalties

Failure to file VAT returns or pay VAT on time can result in penalties and interest charges. These penalties vary depending on the degree of lateness and the taxpayer’s compliance history.

Audits and Investigations

The Revenue Commissioners conduct regular audits and investigations to ensure compliance with VAT legislation. Non-compliance can lead to penalties, fines, and even criminal prosecution in severe cases.

Recent Changes and Updates in VAT Legislation

It’s essential for businesses to stay informed about changes and updates in VAT legislation, as these can impact compliance requirements, rates, and procedures.

Advantages of VAT Registration

VAT registration allows businesses to reclaim VAT paid on purchases, present a professional image to customers, and comply with legal requirements.

Disadvantages of VAT Registration

Registered businesses must comply with VAT regulations, maintain records, and file returns regularly, which can be time-consuming and administratively burdensome.


Understanding VAT in Ireland is crucial for businesses to ensure compliance, manage cash flow effectively, and avoid penalties. By familiarizing themselves with VAT rates, registration requirements, and compliance procedures, businesses can navigate the Irish tax system confidently and focus on their core operations.


  1. What is the standard VAT rate in Ireland? The standard VAT rate in Ireland is currently 23%.
  2. Who needs to register for VAT in Ireland? Businesses whose turnover exceeds or is likely to exceed €75,000 for goods or €37,500 for services must register for VAT.
  3. How often do I need to file VAT returns in Ireland? VAT returns are typically filed on a bi-monthly basis, although some businesses may qualify for quarterly or annual filing.
  4. Can I claim VAT refunds on exports from Ireland? Yes, exporters can claim refunds of VAT paid on inputs related to goods or services exported outside the EU.
  5. Are there any exemptions from VAT in Ireland? Certain goods and services, such as basic foodstuffs and exports outside the EU, are exempt from VAT in Ireland.