This guide will walk you through getting a VAT number, ensuring you have the knowledge to register for VAT and fulfil your financial obligations successfully.
Once you complete VAT registration in Ireland, you must charge it on the products and services you sell. You must also account for VAT in your VAT Returns and pay the tax to Revenue, usually every two months.
We strongly advise contacting an accountant for tailored advice. Our Client Services Team is here to guide you through our service options, ensuring that you receive expert support and guidance for a smooth Irish VAT registration process.
What is Value Added Tax (VAT)?
VAT, or Value Added Tax, is a sales tax added to the price of goods and services at every stage of production or distribution. You may need to collect this tax from your customers, usually added to the price of your product or service, and then pass it on to the government through a VAT Return.
When to register for VAT in Ireland?
Before obtaining a VAT number, it’s crucial to determine if your business requires one. VAT registration isn’t generally necessary for starting a new business in Ireland except under specific conditions. Your business must meet certain criteria before applying VAT to your products or services.
Keep in mind that both Sole Traders and Limited Companies can qualify for VAT registration.
How to register for VAT in Ireland?
- Complete a tax registration form: Fill out the appropriate tax registration form. You can do this online through Revenue Online Service (ROS) if your business is set up in Ireland. There is a paper form if your business is established outside of Ireland.
- Evidence of trade: You must provide proof that your business is engaged in trade with Ireland. This could include invoices, contracts, or other documentation demonstrating your business activities within the country.
- Assessment by Revenue: The Revenue authorities will assess whether your application meets the criteria for VAT registration based on your trade activities and other relevant factors.
- Acceptance or rejection: If approved, you will be issued a VAT number.
- If rejected: You can gather any additional or missing documents and address the issues Revenue raises. Once you’ve resolved the concerns, you can resubmit your application later.
- Ongoing compliance: It’s essential to understand and fulfil your VAT obligations, including the timely filing of VAT returns and payments.
What do you need to apply for a VAT number in Ireland?
To apply for a VAT number in Ireland, you typically need to provide the following:
- Proof of requirement
- Trading activity in Ireland
- Invoices from Irish suppliers and customers
- Information on the directors’ residence
- Physical office address
- Supporting documents could include contracts, business plans, bank statements, and other relevant records.
How long does it take to get an Irish VAT number?
Obtaining an Irish VAT number typically takes around 28 working days. This timeframe applies when there are no additional inquiries or requests for more information from Revenue.
Revenue might require further clarification or evidence regarding your trade activities before issuing your VAT number. Revenue usually grants you a 30-day window to respond if such issues arise. We recommend promptly addressing these requests to avoid delays in processing your application.
To ensure a smooth and timely process, provide accurate and complete information in your initial application and promptly respond to any enquiries from Revenue.
Reasons why Revenue might reject your application
- Lack of local employees
- Absence of customers in Ireland
- No trade with Irish suppliers
- Directors location
- Incomplete or inaccurate information
- Failure to address enquiries
If Revenue rejects your application, you can address the identified issues, gather necessary documentation, and resubmit your application for reconsideration.
Mandatory VAT registration
There are certain instances when VAT registration is mandatory.
VAT registration threshold
If your business’s sales of goods or services exceed the VAT registration thresholds (€40,000 for services or €80,000 for goods within 12 months), VAT registration becomes mandatory. If your sales are below these thresholds, you can register voluntarily.
International transactions
If you engage in cross-border trade within the EU or receive services from outside Ireland, VAT registration might be necessary due to Intra-Community Acquisitions (ICA) and receipt of services criteria.
Should I register for VAT in Ireland? (Non-mandatory VAT registration)
Whether to register for VAT depends on your specific business circumstances and factors. We recommend that you seek professional advice for tailored guidance on your circumstances.
Here are some instances you may voluntarily register for VAT:
Claiming VAT back
Registering for VAT allows you to reclaim VAT paid on business-related expenses, which can improve your cash flow. It can also lend a professional image to your business, especially if dealing with other VAT-registered businesses. However, VAT registration comes with administrative responsibilities, including record-keeping, filing VAT returns, and collecting VAT from customers.
Customer and supplier perception
Some businesses may think that being VAT-registered might instil confidence in customers and partners, as it can signify that your business has reached a certain level of turnover and credibility. However, it’s essential to take a well-rounded approach before making this decision and be mindful of the potential financial implications, especially for smaller businesses.
Frequently Asked Questions
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Larissa is a Fellow Chartered Accountant (FCA) and is the CEO of Kinore, which specialises in company formation, company secretarial, annual accounting services, bookkeeping, tax, and payroll services for micro and small companies in Ireland and the UK.
