Complete VAT Guide for Ireland: Everything You Need to Know

VAT (Value Added Tax) is a tax your business collects for Revenue on the things it sells, reduced by the VAT you have already paid on eligible business costs. You charge it, you hold it for a short while, and you pass on the difference. That difference, output VAT less deductible input VAT, is what you declare on your VAT 3 return, usually every two months through the Revenue Online Service (ROS).

This guide covers the 2026 registration thresholds, the current VAT rates including the change that took effect on 1 July 2026, how returns and deadlines work, what you can and cannot reclaim, when the reverse charge applies, and the records Revenue expects you to keep. It is written for Irish SMEs: sole traders, family firms, contractors, publicans, retailers and farmers, with Limerick and Munster examples where they help.

Who must register for VAT in Ireland in 2026?

You must register for VAT if your turnover from taxable supplies exceeds, or is likely to exceed, €42,500 for services or €85,000 for goods in any continuous period of 12 months. Those are the current figures published by Revenue's VAT thresholds page. If you supply both goods and services, the €85,000 threshold applies where 90% or more of your turnover comes from goods; otherwise the lower €42,500 services threshold governs the whole business.

The phrase that catches people out is "any continuous period of 12 months". Revenue is not looking at your accounting year or the calendar year. It is looking at any rolling 12 months, and also forward at what you reasonably expect. A Limerick web designer invoicing steadily at €3,400 a month sits just under the services threshold. Land one €6,000 project in October and the rolling 12-month total crosses €42,500, so the obligation to register arises then, not at the following 31 December.

How VAT actually works for a business in Ireland

VAT is a self-assessed consumption tax that applies at every stage of the supply chain, and your business sits in the middle of it. Three things happen once you are registered:

• You charge VAT at the correct rate on your taxable sales. That is your output VAT.
• You are charged VAT by your own suppliers. Where the cost relates to taxable business activity, that is your deductible input VAT.
• You file a VAT 3 return showing both figures and either pay Revenue the difference or claim a repayment.

Nobody at Revenue calculates this for you. You work it out, you file it, and you keep the paperwork that proves it, which is why the bookkeeping matters more than the theory. Citizens Information sets out the same structure in plain terms if you want a second read on the basics.

The €10,000 and €41,000 thresholds are different animals

The €10,000 figure is an EU-wide threshold, not an Irish one. If you sell goods to consumers in other member states, or supply telecommunications, broadcasting and electronic services (TBE services) to EU consumers, you add up all of those cross-border sales across every member state. Stay under €10,000 in total and you can keep charging Irish VAT. Go over it and VAT is due in the customer's country at that country's rate, which is where the Union One Stop Shop comes in (covered further down).

The €41,000 threshold covers intra-Community acquisitions. A business that is otherwise below the domestic thresholds, or a flat-rate farmer, must register once goods acquired from other EU member states exceed €41,000 in a 12-month period. Plenty of farmers who never intended to register end up doing so because of machinery bought from the Netherlands or Germany.

Compulsory, voluntary, and when voluntary is worth it

Registration is compulsory once a threshold is crossed or clearly about to be. Below the thresholds you can still register voluntarily, and for some businesses that is a genuinely good decision rather than a form-filling exercise.

Voluntary registration tends to pay when:

• You are spending heavily on VAT-bearing setup costs, fit-out, plant, machinery or equipment, and want that input VAT back rather than buried in your cost base.
• Most of your customers are VAT-registered businesses who simply reclaim whatever you charge them, so your price is effectively unchanged for them.
• You make zero-rated supplies such as exports or most food, which means you charge 0% but still recover input VAT, often putting you in a repayment position.

It tends to hurt when:

• You sell mainly to consumers or to unregistered small businesses, where adding 23% to your prices is a real competitive hit.
• Your input VAT is small because your biggest cost is your own labour.
• You are not ready for the administration. Once you are in, you are in: bi-monthly returns, the annual Return of Trading Details, invoice compliance and record keeping all apply regardless of how small your turnover is.

There is also a cash flow dimension that gets overlooked. You will often pay VAT over to Revenue by the 23rd of the month after a period ends, whether or not your customer has paid you. For a business with 60-day payment terms, that gap can sting. The cash receipts basis (see the returns section) exists partly to solve this. If you are weighing the decision up, it is worth modelling rather than guessing, and it is the kind of thing a small business accountant should be able to sketch out for you in an hour.

Where the normal thresholds do not apply

Several categories sit outside the ordinary threshold rules, and this is where late registrations usually come from:

• Businesses with no establishment in Ireland. A non-established trader making taxable supplies here generally has to register before the first supply. There is no turnover cushion.
• Businesses receiving services from abroad. If you buy in services from a supplier outside Ireland and the place of supply is here, you may have to register and self-account for the VAT even though your own sales are modest.
• Exempt activities. If everything you supply is exempt (certain medical services, insurance, most financial services, some education), you do not register in respect of those supplies and you cannot reclaim the related VAT. Mixed activity changes the picture entirely.
• Flat-rate farmers. A farmer can stay unregistered and use the flat-rate addition instead, but the €41,000 acquisitions threshold and certain other supplies can force registration.
• E-commerce sellers. Marketplace rules, storage of stock in other member states and the €10,000 EU threshold can all create obligations before Irish turnover thresholds are anywhere near.

When registration takes effect, and why you should watch projected turnover

Registration normally takes effect from the start of the taxable period after Revenue processes your application, though it can be backdated in some circumstances and Revenue can assess you from the date you should have registered. That last point is the expensive one. If you cross the threshold in March and register in October, Revenue can look for the VAT that should have been charged from March onwards, and your customers are unlikely to accept a retrospective invoice for it seven months later.

The practical control is simple: check your rolling 12-month turnover every month, not every year, and set yourself an internal alert at roughly 85% of the relevant threshold. That gives you time to decide on pricing, update your invoicing templates and get registered before the obligation bites rather than after. The mechanics of the application, the forms and the format of the number itself are covered in the FAQ and in our separate guide to Irish VAT numbers.

What VAT rates apply in Ireland in 2026?

Ireland operates a standard rate of 23%, a reduced rate of 13.5%, a second reduced rate of 9%, a livestock rate of 4.8%, a farmers' flat-rate addition of 4.5% and a zero rate. The authoritative list, including the searchable rate database for individual goods and services, is on Revenue's current VAT rates page.

Treat that table as a starting point, not as the answer for your own products. Revenue's rate search exists because broad industry labels hide a lot of exceptions, and two items sitting side by side on the same shelf can carry different rates.

The 1 July 2026 change to 9%

The rates listed above applied from 1 January 2026. The significant mid-year change, announced in Budget 2026 and now in force, reduced VAT on restaurant and catering services and on hairdressing from 13.5% to 9% with effect from 1 July 2026, on a permanent basis rather than as a temporary measure. Three points matter for anyone in hospitality:

• Hotel and other short-term guest accommodation stayed at 13.5%. The cut did not extend to a bed for the night.
• Alcohol, soft drinks and bottled water stayed at 23%, wherever and however they are served.
• Food supplied as a catering service moved to 9%, which is a different question from food supplied as a zero-rated grocery item.

If you run a pub or restaurant in Limerick and your till was reprogrammed in early July, go back and check the period straddling the change. Sales on 30 June belong at the old rate and sales on 1 July at the new one, and any deposits, vouchers or pre-booked functions spanning the date need the transitional treatment checked against Revenue's VAT guidance rather than assumed. Classification of individual menu items has not changed just because the rate has.

Zero-rated is not the same as exempt

This is the single most useful distinction in Irish VAT, and it is worth more than it looks.

So a bakery selling zero-rated bread still reclaims VAT on its ovens, its rent and its accountancy fees, and frequently sits in a repayment position with Revenue. A financial intermediary making exempt supplies charges no VAT and recovers little or nothing on its overheads, so VAT is a real cost on its profit and loss account rather than a pass-through. Exemption sounds like a favour until you try to reclaim anything.

Where classification goes wrong

Most VAT assessments we see are not fraud. They are a rate applied consistently and wrongly for three years. The recurring trouble spots:

• Hospitality. A sandwich sold cold to take away is a zero-rated supply of food. The same sandwich heated, or eaten at a table with cutlery and service, is a catering service at 9%. The pint alongside it is 23%.
• Property. Lettings are exempt unless a landlord exercises the option to tax. Sales of property, developed or otherwise, follow their own rules and are genuinely specialist territory. Do not improvise here.
• Construction and the two-thirds rule. Construction services are 13.5%, but if the VAT-exclusive cost of the goods you supply as part of the job exceeds two thirds of the total VAT-exclusive charge, the whole supply takes the rate of the goods, usually 23%. A kitchen fitter charging €2,000 labour and €5,000 for units is not doing a 13.5% job.
• Printed and digital publications. Books and newspapers, including electronic versions, sit at the zero rate. Other printed matter such as brochures, diaries, planners and stationery generally does not.
• Passenger transport. Exempt in Ireland, which restricts input VAT recovery for operators and creates partial exemption problems for businesses with transport alongside taxable activity.
• Mixed and bundled supplies. Where elements are inseparable you have a single composite supply, taxed at the rate of the principal element. Where they are genuinely independent you have multiple supplies, each at its own rate. A meal deal, a hamper and a function package can each go either way depending on how they are put together and priced.

Sector notes for pubs, retailers and farmers

Publicans. You are running at least three rates at once: 23% on drink, 9% on food served as catering since 1 July 2026, and 0% on anything sold as a takeaway food item. Set menus that bundle drink with food need apportioning on a reasonable basis, and your till buttons are effectively your VAT policy, so audit them once a year.

Retailers. The risk is the mixed basket. Most food at 0%, confectionery, biscuits with chocolate and soft drinks at 23%, children's sizes at 0% while equivalent adult sizes are 23%. Point-of-sale mapping errors multiply across thousands of transactions before anyone notices, so reconcile the rate split in your gross margin review, not just at year end.

Farmers. If you are unregistered you add the 4.5% flat-rate addition to prices charged to VAT-registered customers such as marts, co-ops and processors, and you keep it as compensation for VAT borne on farm inputs. You can still reclaim VAT on qualifying capital work, farm buildings, land drainage and reclamation, through a separate refund claim, and you must watch the €41,000 intra-Community acquisitions threshold. Whether the flat-rate scheme or full registration suits you depends on your input VAT profile, which is worth reviewing when you make a large investment. Our page for farm and agricultural clients goes into the wider tax picture.

Working out the VAT: two calculations you will use constantly

To add VAT to a net price, multiply by the rate. To extract VAT from a VAT-inclusive price, use the rate over 100 plus the rate.

1. Adding VAT at 23%. Net fee €1,000 × 23% = €230 VAT, so you invoice €1,230.
2. Extracting VAT at 23%. Gross €1,230 × 23/123 = €230 VAT, leaving €1,000 net. (Dividing by 1.23 gets you to the same place.)
3. Extracting VAT at 13.5%. A €500 hotel room charge × 13.5/113.5 = €59.47 VAT, net €440.53.
4. Extracting VAT at 9%. A €45 restaurant bill × 9/109 = €3.72 VAT, net €41.28. At the old 13.5% rate the VAT on the same €45 bill was €5.35, so the July 2026 change moved €1.63 per €45 either into your margin or off your menu price, depending on what you did with it.

Prices quoted or displayed to consumers must be VAT-inclusive. That is a consumer law point as much as a tax one, and it means a rate change is a decision about your shelf price: pass it on, or keep it and take the margin. Business-to-business quotes are conventionally stated exclusive of VAT, but say so explicitly on the quote, because "plus VAT" written down has settled a lot of arguments.

How do Irish businesses file VAT returns, and when are they due?

Most VAT-registered businesses file a VAT 3 return every two months through ROS, and pay by the 23rd day of the month following the end of the taxable period when filing and paying online. The statutory date is the 19th, with the extension to the 23rd available to ROS filers who both file and pay electronically, which in practice is nearly everyone. Revenue's guidance on returns sits in the VAT section of revenue.ie.

Worked through: your July and August 2026 return covers everything with a tax point in those two months, and it must be filed and paid by 23 September 2026. If you file on paper or pay by a method that is not electronic, you are back to the 19th. The deadline does not extend because it lands on a Saturday, a Sunday or a bank holiday, so a 23rd falling on a Sunday means getting it done on the Friday. Direct debit payers and businesses on annual arrangements work to their own agreed dates.

Filing frequencies other than bi-monthly

Bi-monthly is the default, not the only option. Revenue can approve alternatives based on your VAT liability and circumstances, and you normally apply after you have a filing history.

1. Monthly. Suits persistent repayment traders such as exporters and businesses making mainly zero-rated supplies, because it speeds up refunds.
2. Four-monthly or six-monthly. For businesses with modest annual VAT liabilities, cutting the number of filings.
3. Annual with direct debit. One return a year plus level monthly payments, which smooths cash flow nicely for smaller businesses. Get the monthly amount wrong and you face a balancing payment, so review it mid-year.

Confirm the current qualifying limits with Revenue before assuming you are eligible, because these are administrative arrangements rather than fixed statutory bands.

Completing the VAT 3

The return itself is short. Getting the right figures into the right boxes is the work.

The E and ES boxes are not decoration. They are cross-checked against your VIES statements, and a mismatch is one of the quickest ways to attract a Revenue query about something that was probably a typing error.

Filing and paying through ROS

Everything runs through Revenue Online Service. If you are not already set up, you apply for a ROS Access Number, receive a system password, and download a digital certificate that you then look after carefully, because losing it means starting the process again. Build in time for this: it is not a same-day job, and the week of a deadline is a poor time to discover your certificate expired.

Once inside, you can file the VAT 3, see your statement of account, check payment history and submit amended returns. Payment options include a ROS Debit Instruction, single debit authority, online banking transfer and card, and a direct debit arrangement for businesses on annual accounting.

What if the records are not ready and the deadline is three days away? File on the best figures you have, pay on time, and correct afterwards. A late return with an unpaid liability is a worse position than an imperfect return that you amend. Never simply skip a period: a nil or missing return leaves an open obligation on your Revenue record, and estimates raised in your absence are rarely in your favour. If you would like a fuller walk-through of the mechanics, our post on what you need to know about VAT returns covers it step by step.

The filings that sit alongside your VAT 3

1. Return of Trading Details (RTD). An annual statistical return breaking your year's sales and purchases down by VAT rate. It is due after your accounting period ends, commonly 23 January for a December year end, and it must reconcile with the VAT 3 returns you filed. Unfiled RTDs hold up tax clearance and VAT repayments, which is how most people find out they have missed one.
2. VIES statements. Required where you make qualifying intra-EU supplies of goods or services to VAT-registered customers in other member states, filed monthly or quarterly depending on volume.
3. Intrastat. Detailed statistical returns on the physical movement of goods to and from other member states, required once your arrivals or dispatches exceed the thresholds Revenue publishes.
4. Invoices and records. Keep copies of sales invoices and the originals (or compliant electronic versions) of purchase invoices, plus credit notes, import documents, till records and bank statements, for six years.
5. Electronic invoicing. Irish public bodies must be able to receive structured electronic invoices under the EU eInvoicing rules, so if you supply the public sector you may already be issuing them. Wider mandatory domestic e-invoicing and digital reporting is coming through the EU's VAT in the Digital Age reforms rather than being in force today, so plan for it without assuming it applies to your business-to-business invoicing yet.

Schemes and controls that make VAT easier to live with

Four arrangements are worth knowing about, because the right one changes your cash position rather than just your admin:

1. Cash receipts basis. Account for VAT when your customer pays, not when you invoice. Broadly available where annual turnover is under €2 million or at least 90% of your supplies are to unregistered customers. For a business with slow payers, this is the single most useful application you can make to Revenue. You must notify Revenue if you stop meeting the conditions.
2. VAT groups. Connected entities can be grouped so that one return covers the group and supplies between members are ignored for VAT. Administration drops, and all members become jointly and severally liable.
3. Flat-rate farmers scheme. Compensation through the 4.5% addition instead of registration and returns.
4. Margin schemes. For second-hand goods, works of art, antiques, collectors' items and travel agents' services, VAT is charged on your margin rather than the full selling price. A dealer buying a car privately for €10,000 and selling at €12,000 accounts for VAT on the €2,000 margin, not the €12,000. The invoicing requirements are strict and your customer cannot reclaim a VAT element.

The errors we see most often are mundane: input VAT claimed without a valid invoice, exempt and zero-rated supplies mixed up in the RTD, the two-thirds rule ignored on fit-out jobs, services received from abroad never self-accounted for, rate changes applied from the wrong date, and cash basis businesses still posting VAT on invoice date. Decent bookkeeping software with correctly configured tax rates catches most of them, though it will also propagate a wrong setting across hundreds of transactions without blinking, so someone still needs to review the output. If the monthly grind is the problem rather than the rules, outsourcing the bookkeeping and VAT return preparation is usually cheaper than the interest and penalties on a year of guesswork.

How do input VAT, output VAT and VAT reclaims work?

Output VAT is the VAT you charge on your taxable sales. Input VAT is the VAT you are charged on your purchases. Your return shows output VAT in T1 and deductible input VAT in T2, and the difference is either paid to Revenue or repaid to you. That is the whole arithmetic.

A worked return

Take a Limerick café and bar for the July and August 2026 period, filing by 23 September 2026:

Notice that the zero-rated food purchases carry no reclaimable VAT at all, which is why food-led businesses see a big gap between turnover and reclaimable input VAT. Had this been an exporter with €100,000 of zero-rated sales and the same costs, T1 would be nil, T4 would show €4,171.50, and the business would be claiming a repayment every period.

The four conditions for a valid reclaim

1. You are registered for VAT at the time the cost is incurred.
2. The cost relates to your taxable business activity, in full or in part.
3. The VAT was correctly chargeable in the first place. VAT charged in error by a supplier is not deductible, even though you paid it. Go back to the supplier for a credit note.
4. You hold and retain a valid VAT invoice, or the relevant import documentation, addressed to the business.

A card statement, a till receipt without VAT details or an invoice in a director's personal name will not do. Claims are generally subject to a four-year time limit, so old input VAT surfacing during a review may already be out of reach.

What you can and cannot reclaim

Two traps worth naming. First, mixed private and business use needs a defensible apportionment, not a round number chosen because it looked reasonable: a home broadband bill for a sole trader working three days a week from the kitchen table is not 100% business. Second, where consideration for a purchase remains unpaid for six months, Irish VAT law can require you to adjust the input VAT you claimed. Cash flow pressure and long-running supplier disputes are exactly the circumstances in which this catches honest businesses, so keep an eye on your aged creditors listing alongside your VAT account.

Apportionment and partial exemption

If you make both taxable and exempt supplies, you are partially exempt and you cannot simply reclaim everything. Costs used wholly for taxable activity are fully recoverable, costs used wholly for exempt activity are not recoverable, and dual-use costs such as rent, heat, light and audit fees have to be apportioned on a method that gives a fair and reasonable result. Turnover-based apportionment is common but it is not automatically the right answer, and whatever method you use needs reviewing annually as the mix shifts.

Where this gets genuinely technical is property, financial services, medical practices with both exempt treatment and taxable retail income, and anyone within the capital goods scheme, where the VAT treatment of a property can be adjusted over a period of up to 20 years as its use changes. If any of that describes you, get transaction-specific tax advice before you file rather than after Revenue asks.

How refunds actually reach you

You claim a repayment through the T4 box on the VAT 3, not by separate application. Revenue may hold the refund and request supporting documentation, particularly on first claims, large one-off claims and recurring repayment positions, and unfiled RTDs or other outstanding returns will stall it. Keep the purchase invoices for a big capital claim together in one folder from the outset and the query takes a morning instead of a fortnight.

Most missed reclaims are not clever technical points. They are receipts that never made it into the records: fuel bought on a Friday afternoon, tools paid for in cash, a subscription on a personal card. Photograph receipts at the point of purchase into whatever app your accounting software supports, and the leakage largely stops. If you would rather hand the whole cycle over, our VAT services cover return preparation, reclaim reviews and Revenue correspondence.

When does the VAT reverse charge apply in Ireland?

Under the reverse charge, the customer accounts for the VAT instead of the supplier. The supplier issues an invoice showing no VAT, and the customer puts the VAT on its own return. Where the customer has full recovery rights, the same amount appears as output VAT in T1 and as input VAT in T2, so the cash effect is nil but the reporting is mandatory. Where the customer has restricted recovery, the reverse charge creates a genuine cost.

The main Irish reverse charge situations

1. Services received from abroad. Under the general business-to-business place of supply rule, services bought from a supplier established outside Ireland are taxed where you, the customer, are established. You self-account for Irish VAT at the Irish rate for that service.
2. Intra-Community acquisitions of goods. Goods bought from a VAT-registered supplier in another member state arrive without that country's VAT, and you account for Irish VAT on the acquisition.
3. Construction services within Relevant Contracts Tax (RCT). Where a subcontractor supplies qualifying construction services to a principal contractor inside the RCT system, the subcontractor invoices without VAT and the principal accounts for it. The invoice must carry wording to that effect.
4. Other designated supplies. Scrap metal, certain gas and electricity supplies through traders, greenhouse gas emission allowances, construction work supplied in specified circumstances and other categories Revenue has designated.

Imports, exports and intra-EU supplies

Goods coming from outside the EU are imports, and VAT is due at the point of entry unless you use postponed accounting, which lets you account for the import VAT on your VAT 3 (box PA1) instead of paying it at the border. For most importers that is a meaningful cash flow gain, and it has been particularly valuable for Irish businesses buying from Great Britain since Brexit.

Going the other way, exports outside the EU are zero-rated, and intra-Community supplies of goods to a VAT-registered customer in another member state are zero-rated provided you meet the conditions:

1. You obtain and record the customer's VAT number and verify it, and you keep evidence of that verification.
2. You hold proof that the goods physically left Ireland: transport documents, carrier confirmations, signed delivery notes.
3. You report the supply correctly in the E1 box and on your VIES statement.

Fail on the VAT number or the transport evidence and Revenue can treat the supply as domestic, which means Irish VAT at 23% out of your own margin on a sale where you charged none.

Cross-border sales to consumers

Selling to consumers rather than businesses is a different regime. Once your total cross-border business-to-consumer sales of goods and TBE services across the EU exceed €10,000 in a calendar year, VAT is due in the customer's member state at that state's rate. Rather than registering in each country, you can register for the Union One Stop Shop (OSS) through ROS, file a single quarterly return covering all your EU consumer sales and pay Revenue, who distribute the money onward. For goods imported from outside the EU in consignments up to €150 sold to EU consumers, the Import One Stop Shop (IOSS) does a similar job at the point of import. Online marketplaces are deemed suppliers for certain sales, so check whether the platform is already handling the VAT before you register for anything.

Northern Ireland is its own case. For goods, Northern Ireland remains aligned with EU VAT rules under the Windsor Framework, so a sale of goods from Limerick to Belfast is treated broadly as an intra-EU supply of goods rather than an export. For services, Northern Ireland is part of the UK and outside the EU VAT system. Getting this backwards is common, and it is the first thing worth checking if you trade across the border.

A worked reverse charge example

A Limerick consultancy buys €5,000 of software development from a Polish company. The Polish supplier issues an invoice for €5,000 with no VAT, quoting both VAT numbers and a reverse charge note. The Irish business:

1. Applies the Irish rate that the service would carry here, 23%, giving €1,150.
2. Includes €1,150 in T1 as output VAT.
3. Includes €1,150 in T2 as input VAT, because the cost supports fully taxable activity.
4. Includes €5,000 in ES2 as services received from another member state.
5. Records the transaction in the purchases day book gross of the self-accounted VAT so the audit trail ties back to the supplier invoice.

Net effect on the return: nil. Net effect of ignoring it: an unreported liability that a Revenue audit will find in the accounts payable ledger in about ten minutes. Change one fact, though, and the picture changes with it. If the same business were only 40% recoverable because of exempt income, it could claim €460 and the remaining €690 would be a real, unbudgeted cost of buying that service from abroad.

Frequently asked questions

How do I register for VAT and get an Irish VAT number?

You register through the eRegistration facility in ROS. Individuals and partnerships use Form TR1 and companies use Form TR2, and non-established businesses use the equivalent foreign trader versions. There is no fee. Revenue will usually want evidence that you are trading or about to trade in Ireland, such as contracts, invoices, a business plan, a business bank account or a lease, and you choose between domestic-only registration and intra-EU registration depending on whether you will trade with other member states. Sole traders register under their PPSN-linked tax registration, partnerships register the partnership itself, and companies register the company using its Companies Registration Office (CRO) number and tax reference, so if you have not settled on a structure yet, our comparison of sole trader versus limited company is the place to start. An Irish VAT number takes the form IE followed by seven digits and one or two letters, and it belongs on every VAT invoice you issue. For the detail of the application, timelines and what to do if Revenue comes back with questions, see our guide to getting a VAT number in Ireland.

What details must be included on a valid Irish VAT invoice?

A valid VAT invoice needs the date of issue, a unique sequential number, your name, address and VAT number, the customer's name and address, the customer's VAT number where the reverse charge or an intra-Community supply applies, the date of supply if different from the invoice date, a description and quantity of the goods or services, the net amount for each rate, the rate applied, the VAT amount for each rate and the gross total. Invoices must generally be issued by the 15th day of the month following the supply. Simplified invoices are permitted for small retail amounts, credit notes must reference the original invoice and show the VAT being reversed, and foreign currency invoices need the euro VAT amount shown using an acceptable exchange rate. Reverse charge invoices must state that the customer accounts for the VAT, and margin scheme invoices must be labelled as such and show no separate VAT.

What happens if I register late, miss a return or pay VAT late?

Revenue can register you retrospectively from the date the obligation arose and assess the VAT that should have been charged, which is a liability you may not be able to recover from customers after the event. Late payment attracts daily interest, and late or missing returns can lead to penalties, restriction of tax clearance, withheld repayments and Revenue intervention ranging from a letter to a full audit. Serious defaults can end up in the quarterly list of tax defaulters, which is published and read locally. The practical advice does not change: file and pay what you can on time, correct errors promptly through an amended return or an adjustment, and make a voluntary disclosure before Revenue contacts you, because unprompted disclosure significantly reduces penalties compared with waiting to be found. Talking to Revenue about a phased payment arrangement is far better than silence.

Should I register for VAT voluntarily if I am under the threshold?

It depends almost entirely on who your customers are. If they are VAT-registered businesses, charging VAT costs them nothing and you gain input VAT recovery, so voluntary registration usually wins. If they are consumers, adding 23% to your prices without raising your net income is a competitive disadvantage that recovering VAT on your overheads rarely offsets. Heavy upfront capital spending shifts the balance toward registering early, because VAT incurred before you register is generally lost.

How long do I have to keep VAT records?

Six years is the general retention period for VAT records, and longer in some cases: OSS records must be kept for ten years, and property transactions within the capital goods scheme can require records for up to 20 years because the VAT position is adjusted over that period. Electronic storage is fine provided the documents remain complete, legible and unaltered, and you can produce them if Revenue asks.

Can I reclaim VAT on a van or a company car?

Vans and other commercial vehicles used for business purposes are generally fully recoverable. Passenger cars are not, with two exceptions: businesses whose trade is the vehicle itself, such as driving instructors, taxi operators and car hire firms, can recover in full, and a limited partial recovery is available on qualifying passenger vehicles meeting Revenue's conditions on business use, emissions and registration date. Diesel for business use is recoverable, petrol is not. That combination is why almost every tradesperson in Munster drives a van.

What should your business do next about VAT?

Work through this before your next filing date rather than after it:

1. Confirm your registration status and whether your registration is domestic-only or intra-EU. If you trade with other member states on a domestic-only registration, fix it.
2. Calculate your rolling 12-month turnover against the €42,500 and €85,000 thresholds, and project the next six months rather than looking only backwards.
3. Re-check the rate on every product and service line, especially anything affected by the 1 July 2026 move to 9%, against Revenue's rate search.
4. Pull three recent sales invoices and test them against the invoice requirements in the FAQ above. Do the same for three purchase invoices you have claimed VAT on.
5. Reconcile your VAT control accounts to the returns you filed for the last four periods, and check the RTD agrees with them.
6. Put every ROS filing date for the next 12 months in the calendar with a reminder five days early, and confirm your digital certificate expiry date while you are there.
7. Review your aged creditors for invoices unpaid beyond six months where input VAT has already been claimed.

Some situations are not checklist material. Cross-border sales, exempt income sitting alongside taxable income, any property transaction, construction work inside the RCT system, partial exemption calculations and the capital goods scheme all reward getting advice on the specific transaction before it happens, because VAT positions are difficult and expensive to unwind afterwards.

Use the linked guides above on VAT numbers, VAT returns and reclaiming VAT to go deeper on any one area. If you would rather have someone else own the compliance calendar, we handle VAT registrations, returns, reclaim reviews and Revenue correspondence for businesses across Limerick and Munster, alongside income and corporation tax returns. Get in touch for a registration, return or compliance review.

The information in this blog is provided for general informational purposes only and does not constitute accounting, tax, business, or legal advice. While Coffey & Co aims to ensure the content is accurate and up to date, no guarantee is given regarding its completeness or suitability for any particular purpose.