VAT – a quick guide

How do I register for VAT?

To register for VAT, you need to complete a pdfForm TR1 (if you are an individual, partnership or unincorporated body) or a pdfForm TR2 if you are a company. The form, when completed, should be forwarded to your local Revenue District.

Special care should be taken, when completing the form, to include your name, address, PPSN, business type and the relevant tax types. The form must also be signed and dated. Make sure to include a contact phone number with the form when sending it in. This will enable the office to contact you with any queries regarding the information on the form.

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Who must register for VAT?

A trader is generally required to register for VAT for making supplies of goods and/or services, subject to his or her turnover exceeding certain thresholds. The most common are €37,500 for the supply of services, and €75,000 for the supply of goods. Some traders are generally not required to register for VAT, although they may choose to do so. These include traders whose turnover does not exceed the thresholds above, and also farmers. Traders engaged in exempt activities are not permitted to charge VAT. However, they may, in common with farmers, Government Departments and other bodies be required to register for VAT, in order to account for VAT on services or goods received from suppliers outside Ireland.

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What is the turnover threshold for VAT registration?

The principal thresholds applicable are as follows:

  • (a) €35,000 in the case of persons supplying services (increased to €37,500 as from 1st May 2008),
  • (b) €35,000 for persons supplying goods liable at the 13.5% or 21.5% rates which they have manufactured or produced from zero rated materials (increased to €37,500 as from 1st May 2008),
  • (c) €35,000 for persons making mail-order or distance sales into the State,
  • (d) €41,000 for persons making intra-Community acquisitions,
  • (e) €70,000 for persons supplying goods (increased to €75,000 as from 1st May 2008),
  • (f) €70,000 for persons supplying both goods and services where 90% or more of the turnover is derived from supplies of goods (other than of the kind referred to at (b) above) (increased to €75,000 as from 1st May 2008) and
  • (g) A non-established person supplying taxable goods or services in the State is obliged to register and account for VAT irrespective of the level of turnover.

A taxable person established in the State is not required to register for VAT if his or her turnover does not reach the appropriate threshold above. However, they may opt to register for VAT.

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I am a flat rate farmer and I am going to buy a combine harvester in the UK. Do I have to register for VAT?

Yes, if the cost of the machine exceeds €41,000 you are obliged to register for vat in Ireland in respect of your EU acquisitions only. However you may retain your flat rate status in respect of your normal farming activities. You must pay vat on the cost of the machine at 21.5% and you are not entitled to take a deduction.

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I am established in Ireland, and supply Fourth Schedule services to customers abroad. Do I have to register for VAT?

No, you do not have to register for VAT. In fact, traders established in the State who make no taxable supplies in the State, but only supply Fourth Schedule services outside the State, are strictly speaking not entitled to register for VAT. However, these traders would then be obliged to recover any VAT incurred in Ireland by the complex route of an 8th or 13th Directive repayment claim.

In order to facilitate these traders in recovering VAT, Revenue allows them to apply for VAT registration in the State. The traders should then reclaim any VAT incurred in Ireland in their periodic VAT return, rather than through the Unregistered VAT Repayments Branch.

Traders who are already registered in respect of the provision of services in the State should similarly recover all VAT incurred in relation to Fourth Schedule services in their normal VAT return.

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