Being a member of the EU, Ireland follows the EU directive on VAT compliance. However, it enjoys the liberty to set its own standard upper VAT rates (above 15 percent).
Many people wonder how much the VAT in Ireland is and how they can calculate it. The VAT rate is different for different goods and services, and you can calculate it by using the Irish VAT calculator.
The current standard VAT rate in Ireland is 23%. The Irish VAT rates change from time to time. This rate applies to all goods and services that are not covered under the lower VAT rate groups. The best way to calculate the VAT rates Ireland is by using our VAT calculator that has all the
For people who want to know how much the VAT rate in Ireland is for products not covered by the 23 % standard VAT rate, click here
13.5 % VAT rate
Items covered under the 13.5 % rate include:
9 % VAT rate
Ireland has a 9 % VAT rate for the following goods and services:
4.8 % VAT rate
The 4.8 % VAT rate applies to agricultural products and services, including livestock, greyhounds, and hose hiring services. However, it does not apply to chicken businesses.
0 % VAT
The 0% VAT rate applies to all export items, including oral medicines, books, coffee, vegetable seeds, hearing aids, milk, tea, and wheelchairs.
Goods and services exempted from VAT
Ireland does not charge VAT on educational, medical, financial services, and theatrical and musical services. However, if the theatrical or musical services involve the serving of food and drinks, it will not enjoy VAT exemption. You can use the Irish VAT calculator to know how much VAT you are required to pay in such a case.
Businesses that supply goods or services registered for VAT in Ireland are required to collect the applicable VAT and pay the amount to Ireland’s tax authorities.
VAT can be charged either on an invoice basis or cash basis.
Under the invoice-based system, suppliers of goods and services are required to charge VAT on every invoice they issue. What this means is that you have to pay the VAT no matter when you get paid. The VAT on invoices is calculated within the taxable period, and you must make the payment come what may.
When it comes to the cash-based VAT system, here you pay VAT on the payments you receive. This means that you pay the VAT only when you get your payment. The condition of the taxable period does not apply to you under this setup.
Businesses with an expected yearly turnover lower than Euro 2 million should opt for the cash-based VAT. Also, the cash-based VAT mechanism is suitable for you if 90 percent of your customers are not registered for VAT. You have the discretion to choose whichever of these two VAT systems you want to use; however, the cash-based system helps with cash flow.
Foreign businesses registered for VAT in Ireland are required to obey the and follow the Irish VAT Act, which covers rules for invoice preparation, disclosure, electronic invoicing, bookkeeping and recordkeeping, invoice correction, credit notes processing, and foreign currency rates.
The rule of the tax payment period indicates when your VAT payment is due. You have to pay the amount to the tax authorities of Ireland 10 days after the monthly or quarterly VAT reporting period ends. In the case of most goods, it means the time of delivery or transfer of title. In the case of services, it is the completion of service delivery.
Many people wonder if they should register for VAT or not. The rule of thumb is that if your business is service-based, you must register for VAT if you think that your annual business revenue will be €37,500 or higher. In the case of goods-based business, you should register for VAT is you anticipate your revenue to be €75,000 or higher a year. If you are doing a business that involves both goods and services, then you should be cautious and comply with the €37,500 number instead of the €75,000.
The VAT was introduced after the European Union came into being. Before that, different European countries were using different and complex tax systems. EU member countries came up with the VAT system to ensure that the taxation mechanism is neutral, transparent, and less complicated.
Value-Added Tax (VAT) in Ireland is a broad-based consumer spending tax that applies to the value of goods and services. It covers most goods and services that are sold to customers within Ireland. Furthermore, VAT also applies to most goods that are imported into Ireland from countries other than the EU members. You can use the VAT calculator to find out how much VAT you are required to pay to the tax authorities for different goods and services.
However, VAT does not generally apply to goods and services that are exported from Ireland to other countries. While this tax applies to almost all goods and service businesses done within Ireland, it does not apply to businesses that do not meet the annual turnover threshold set by the tax authority.
For example, if you have a service-based business in Ireland and your annual turnover is below €37,500, you are not subject to VAT. As such, you do not need to charge VAT from your customers. If your annual turnover is above this amount, then you have to collect VAT from your customers and pay it to the tax authorities.
Many people wonder as to why VAT is called a consumption tax. The reason why VAT is a consumption tax is that the final consumer of the goods or services pays the tax, instead of the business that produces and sells the goods or services. The business simply collects the tax from the consumers and then pays it to the government. It is a type of indirect tax.
The VAT is charged as a percentage of the price of goods and services in Ireland. This implies that the real tax liability is evident at each step of the manufacturing and supply chain. It is charged marginally through a mechanism of fractional payments where a business registered for VAT or a taxable person subtracts from the VAT the tax they have disbursed to other taxable people or businesses on purchase from their commercial activities. This system strengthens the neutrality of the tax mechanism, irrespective of how many sales or transactions are made.
Many people have confusion regarding the definition of a taxable person and an accountable person. A taxable person is any individual involved in an independent business. It also includes people who have VAT exemption and flat-rate farmers.
On the other hand, an accountable person is someone who is responsible for charging VAT. This includes taxable persons like an individual and a business that is involved in the supply of goods and services and who meets the minimum turnover threshold to charge VAT from its customers, whether registered for VAT or not.
If you are involved in the supply of goods or services that are exempt from VAT, it means you are a taxable person but not an accountable person. In such a case, you are not required to register for VAT unless you start supplying taxable goods and services that are subject to VAT. In other words, you would register for VAT only if you supply goods or services that are taxable.
The VAT in Ireland is calculated by multiplying the applicable Irish VAT rates by the total cost before tax of the product or service. The cost of VAT is then included in the selling price of the product or service.
For example, if the cost of a taxable product is €100 and it falls under the standard (23 percent) VAT rate, here’s how its VAT is calculated:
€100 x 23% = €23 VAT
€100+€23 = €123 selling price of the product
Or... you can use our VAT calculator - click here that has all the rates built in... for adding or substracting VAT.
In case you want to calculate the VAT from a product’s selling price, divide the selling price by the VAT rate divided by 100. Add 1 to the calculated amount.
€100 with VAT at 23 percent standard VAT rate
(23/100) + 1 = 0.23 + 1 = 1.23
€100/1.23 = €81.30 cost before VAT
While the formula to manually calculate the VAT may seem easy to you, the fact is that it can get complicated given the scope of your business, the goods or services you supply, the different VAT rates that apply to different goods and services, the nature of your business like whether you are supplying a combination of goods and services, and tax exemption on certain goods and services.
So, what do you do in such a case? The good news is that you can liberate yourself from all the complications and manual calculations by simply using a VAT calculator.
The VAT calculator is an online calculator developed solely for the calculation of VAT in Ireland. It allows you to easily calculate the amount of VAT you are required to pay and the gross price of your goods or services based on the net value.
You can even use the VAT calculator to easily add VAT to the net or gross amount or deduct it from the net or gross amount. The VAT calculator lets you work with any VAT rate, meaning that you can work with it even if the VAT rates change over time by simply putting in the new VAT rates.
Using this calculator, you can find out the VAT for different products and services within two seconds. This will not only save you time but also improve your productivity. Instead of spending hours calculating the VAT manually, you can simply open the VAT calculator, enter the figures, and get the VAT instantly.
You can use the time saved by using the online VAT calculator on the more important things in your business. With manual VAT calculations, the chances of errors are higher. If you end up paying the wrong amount, it may come with a penalty from the tax authorities. The VAT calculator completely eliminates human-error in VAT calculation. You can use this calculator with confidence and without worrying about any errors, given you input the correct figures.
However, prior to using the calculator, you should take some time to read and research more about VAT in Ireland. Doing so will expand your understanding of the tax mechanism and help you use the calculator effectively.
If you want to pay VAT in Ireland, you should do some research about VAT rates Ireland and then register your business for VAT via the Revenue’s Online Services (ROS). To use this service, your business must be operating in the State.
If your business is already established in the State, you can register for VAT by filling the TR1 or TR2 form. The TR1 registration form is for individuals, partnerships, sole traders, and trusts, whereas the TR2 is for limited companies.
The best way to register for VAT payment is through the ROS. However, if for any reason, you are unable to complete the online application, you can complete a paper-based TR1 (FT) or TR2 (FT) form and submit it to the Revenue office.
Address of Revenue office:
Office of the Revenue Commissioners
Dublin City Centre/North City Business Taxes District
9/15 Upper O'Connell Street
In case your business is not established in the State, you can submit a paper-based TR1 (FT) and TR2 (FT) form.
The VAT registration will come into effect at the date agreed between you and your local tax district after the Revenue office receives the completed application. In most cases, the date on which the VAT payment becomes effective is not before the start of the taxable period during which you file for registration.
After you are registered for VAT, you can use the VAT calculator to know how much VAT you are required to pay. You can then start to file your tax returns and pay the VAT electronically.