This Section deals with the rules relating to registration for VAT purposes. It describes who is obliged to register, who may or may not register and the procedures for registration. The treatment of non-established suppliers is also set out in VAT Information Leaflet 'Foreign Suppliers Doing Business in Ireland'.
- Taxable persons & Accountable persons
- Thresholds for Registration for VAT
- How is the threshold determined?
- Exempt persons and non-taxable entities acquiring goods within the EU
- Services received from abroad that are taxable where received
- Electronic services supplied by non-EU suppliers to private individuals in the EU
- Supply of cultural, artistic, sporting, scientific, entertainment or similar services by non- established promoters and artists
- Construction operators
- Non-established suppliers making distance sales to Ireland
- Electing to register
- Registration procedures
- Registration of new business
- Cancellation of registration
- Cancellation of a 'Holiday Home' election
- Relief for stock-in-trade for newly registered traders
- Group registration
- Who may not register in respect of supplies of goods or services?
- Premises provided to mobile traders
- Option to tax (lettings)
- Liquidators and Receivers
1. Taxable persons & Accountable persons
A taxable person is any person who independently carries on a business in the Community or elsewhere. It includes persons who are exempt from VAT as well as flat-rate farmers. VAT law provides that VAT is chargeable on the supply of goods and services effected within the State for consideration by a taxable person acting as such, other than in the course or furtherance of an exempted activity. A person who is required to charge VAT is referred to as an accountable person.
An accountable person is a taxable person who independently:
- supplies taxable goods or services in the State
- makes intra-Community acquisitions of goods in the State
- receives services from abroad that are taxable where received, (see Supply of Services, paragraph 3)
- receives cultural artistic entertainment or similar services provided by a person not established in the State (see Supply of Services paragraph 9)
- is involved in property transactions in the State and is obliged to register for VAT in the State (see Guide to VAT on Property)
- receives goods for installation or assembly in the State from a person not established in the State
- is, in receipt, as a principal contractor, of construction services in the State from a sub-contractor including a non-established sub-contractor
- is, in receipt of supplies of gas through the natural gas distribution system or electricity from a person not established in the State
- is in receipt of greenhouse emission allowances from a supplier established within the State or abroad
- is a person who carries on a business in the State which consists of or includes dealing in scrap metal and who receives a supply of scrap metal from another taxable person who carries on a business in the State
- is a person in receipt of construction services, in the State from a connected person
Accountable persons are obliged to comply with all necessary requirements arising from such registration (see Accounting for VAT, Invoices Credit Notes and Records to be Kept) if any of the appropriate thresholds outlined below are exceeded, or are likely to be exceeded, in any twelve-month period.
See Farmers leaflet for an outline of the VAT obligations of farmers.
2. Thresholds for Registration for VAT
In the case of supplies in the State and intra-Community acquisitions, registration is obligatory where certain turnover thresholds are exceeded or are likely to be exceeded in any twelve-month period. However, it should be noted that in relation to Distance Sales, the threshold is based on a calendar year. The principal thresholds applicable are as follows-
|Date Effective From||Goods1||Services2||ICAs3||Distance Sales4||Foreign Traders5||Received Services6|
|1 May 2008||75,000||37,500||41,000||35,000||0||0|
- While the general turnover threshold for the supply of goods is €75,000, persons supplying goods liable at the reduced or standard rates which they have manufactured or produced from zero-rated materials must register if their turnover is €37,500 or more.
- While the general turnover threshold for the supply of services is €37,500, 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 in the above paragraph) then the threshold for Goods applies.
- Intra-Community acquisitions of goods for business purposes by a person in the State
- Distance sales of goods by a foreign trader to non-registered customers in the State
- Persons not established in the State but supplying goods and services here must register regardless of the level of turnover.
- Persons receiving services from abroad for business purposes in the State must register regardless of the level of turnover.
A non-EU business supplying electronic services to private consumers in the State is obliged to register and account for VAT irrespective of the level of turnover. However, an optional scheme is available to enable the supplier to register in one EU Member State. (See paragraph 6)
An accountable person established in the State is not required to register for VAT if their turnover does not reach the appropriate threshold above. However, they may elect to register for VAT.
In the case of services received from abroad that are taxable where received, no threshold applies and all such services are liable to VAT. Special rules also apply in the case of farmers and fishermen in receipt of services from abroad that are taxable where received. See Leaflet on Farmers
The turnover thresholds set out in paragraph 2 do not apply to persons who are not established in the State. Where such persons supply taxable goods or services in the State in the course or furtherance of business, they are obliged to register and account for VAT in respect of all such supplies (but see paragraphs 7 to 9). (See Foreign Suppliers Doing Business in Ireland).
Persons who make no taxable supplies in the State are neither obliged nor entitled to register for VAT in the State.
For taxable property transactions the thresholds for registration do not apply. For further details refer to the Guide to VAT on Property.
3. How is the threshold determined?
For the purposes only of deciding if a person is obliged to register for VAT, the actual turnover may be reduced by an amount equivalent to the VAT borne on purchases of stock for re-sale.
Annual purchases of stock for re-sale €60,000 (VAT Inc.) [€48,780.60 plus €11,219.40 VAT at the standard rate] Actual turnover €80,000 (VAT Inc) Less VAT on stock for re-sale (€11,219.40) Turnover €68,780.60
As the business’ turnover is below the registration limit of €75,000 after the deduction of €11,219.40 VAT charged to them on purchases of stock, the business is not obliged to register.
4. Exempt persons and non-taxable entities acquiring goods within the EU
Exempt persons and non-taxable entities who acquire or are likely to acquire more than €41,000 worth of goods from other Member States in any period of twelve months are obliged to register for VAT in respect of those intra-Community acquisitions. Exempt persons and non-taxable entities below this threshold may elect to register in respect of such acquisitions.
It should be noted that exempt persons and non-taxable entities acquiring new means of transport or excisable goods must register for VAT irrespective of the value. Registration by exempt and non-taxable persons for receipt of intra-Community acquisitions does not give VAT deduction rights (see State Procurement, Acquisitions from other EU Member States and VAT Due VAT Deductible).
5. Services received from abroad that are taxable where received
See place of Supply of Services.
6. Electronic services supplied by non-EU suppliers to private individuals in the EU
Where a non-EU business supplies electronic services to a private consumer in any EU Member State, the place of supply is the place where the consumer normally resides. The main effect of this is that suppliers of these services are obliged to register and account for VAT in every EU Member State where they have private customers. However, an optional special scheme is available, which allows such non-EU businesses to opt to register in one EU Member State only.
The special scheme enables the non-EU supplier to choose an EU Member State in which to register for and pay VAT, regardless of the EU Member State in which the supplier's private consumer resides. Once registered, the supplier makes VAT returns to that EU Member State, declaring the VAT due on all the on-line sales to consumers within the EU. The rate of VAT is the standard rate in the country in which the consumer resides. A special on-line return form for suppliers who wish to register for VAT in the State is provided under which the supplier must provide a breakdown of all electronic supplies to customers in each EU Member State. Payment is made to a designated account in the EU Member State of registration. That EU Member State re-distributes the VAT receipts to other EU Member States in accordance with the amounts due as declared by the supplier.
Revenue have set up a register of non-EU suppliers who opt to register in the State under the scheme. Registration is only accessible through the Revenue on-line Service (ROS). Suppliers must furnish certain details to ROS in order to register under the scheme. A section of the ROS website, especially for non-EU suppliers, facilitates applicants in the registration process.
A supplier registered under the scheme is allocated an identification number (the special VAT number for electronic services) and a digital certificate by ROS. Suppliers on the Irish register use their digital certificates to access the system via ROS. Suppliers must submit special VAT returns and pay Revenue the VAT due in respect of their supplies in all EU Member States including Ireland by the 19th day of the month following the end of each calendar quarter. Payment must be made in euro to a bank account designated by Revenue. (See VAT on eServices (VOES) / Electronic Services Scheme ).
7. Supply of cultural, artistic, sporting, scientific, entertainment or similar services by non- established promoters and artists
Registration is required by non- established promoters and artists who self- promote in respect of admissions to cultural, artistic, scientific, educational or similar events, held in the State, where the admission charges are liable to VAT and the promoter/artist is responsible for the admissions. See: VAT treatment of the right of admission to cultural, artistic, sporting, scientific, educational, entertainment, or similar events, and services ancillary to the admission.
8. Construction operators
Sub-contractors not established in the State who provide construction services to principal contractors who are within the scope of Relevant Contracts Tax (RCT) (as defined in section 530 of the Taxes Consolidation Act 1997) are not required to register for VAT. VAT must be accounted for by the principal as if he or she had supplied the service. Also, where there are supplies of construction services in the State bewteen two connected persons the recipient is the accountable person. (See Reverse Charge Construction).
Supplies by established and non-established contractors to persons other than those in the construction industry will continue to be treated under the existing system. For example, a builder who builds an extension for a private individual or an electrician who installs a new alarm system in a shop will charge and account for VAT on the supply. The reverse charge will not apply to these supplies.
9. Non-established suppliers making distance sales to Ireland
Distance sales covers mail-order sales and phone or tele-sales made to persons in the State who are not accountable persons, by a supplier registered in another EU Member State where the supplier is responsible for delivery of the goods. (See Distance Sales in EU and Intra-Community Supplies paragraph 12).
10. Electing to register
A person established in the State whose turnover from supplies in the State or whose intra-Community acquisitions do not exceed the appropriate thresholds may elect to become registered but only from a current date. The procedures for those electing for VAT registration are the same as those for traders who are obliged to register. A person who elects to become registered is subject to the same obligations as other registered traders (see paragraph 12 below).
11. Registration procedures
E-registration is a Revenue initiative to enable Agents and Customers who have registered with ROS or PAYE Anytime to manage their Revenue registrations online. Introduced in 2009, it was significantly enhanced in 2012, and it now represents a comprehensive alternative to paper-based correspondence.
While a paper application is still required in a limited number of registration transactions, all paper applications received which could otherwise be completed online will be returned to the agent with a request that the transaction be dealt with online.
Registration is effective from the beginning of the next taxable period of two months after the date on which the completed application is received, or from such earlier date as may be agreed between the Revenue District and the applicant. In the case of a person not obliged to register but who is electing to do so, the effective date will be not earlier than the beginning of the taxable period during which the application is made.
Applicants who cannot avail of the e-Registration facility must complete the hard copy version of the TR1 Registration Form (PDF, 225KB) in the case of VAT registration for individuals, trusts and partnerships or TR2 Registration Form (PDF, 217KB) in the case of VAT registration for companies. The hard copy version of the completed form, signed and dated should be sent to the local Revenue District where the taxpayer is established. Non-established persons should complete TR1 (FT) Registration Form (PDF, 220KB) in the case of VAT registration for individuals, trusts and partnerships or TR2 (FT) Registration Form (PDF, 210KB) in the case of VAT registration for companies. The hard copy version of the completed form, signed and dated should be sent to the Office of the Revenue Commissioners, Dublin City Centre/North City Business Taxes District, 9/15 Upper O'Connell Street, Dublin 1.
Any change in the particulars supplied by a trader for the purposes of registration (for example, a sole trader becoming a limited company or the cessation of a partnership) must be notified to the appropriate Revenue District within 30 days of the change.
12. Registration of new business
A person who is setting up a business but who has not yet commenced supplying taxable goods or services may register for VAT as soon as it is clear that he or she will become an accountable person. This will enable that person to obtain credit for VAT on purchases made before trading actually commences.
In general, farmers are not obliged to register for VAT in respect of their farming activities. However, special rules apply to farmers who, for example, supply bovine semen, agricultural contracting services and who retail horticultural products. (See Agricultural Services and Horticultural Retailers).
13. Cancellation of registration
A person who has elected to register for VAT may cancel their registration by arrangement with the relevant Revenue District. It is a condition of such cancellation that they pay to Revenue any excess of VAT refunded to them over the tax paid for either:
- the taxable periods during which the election had effect or
- three years prior to the date of application for cancellation, whichever is the lesser
A person whose turnover has fallen below the appropriate turnover threshold may have the registration cancelled.
The VAT to be repaid to Revenue is calculated as follows:
(A + B) - C
A - Is the amount of tax repaid to the person for the period for which the election has effect in respect of tax borne or paid in relation to the supply of goods or services
B - Is the tax deductible in respect of intra-Community acquisitions made by that person during that period
C - Is the net total amount of tax (if any) paid by such person in relation to the supply of goods or services by that person in the same period
Where a farmer who would not otherwise be an accountable person has elected to register for VAT and wishes to cancel that election, then the review period is also the period for which the election had effect or three years, whichever is the lesser. For the purpose of calculating any excess of VAT refunded to him over VAT repayable to him, the amount of tax paid by the farmer should be increased by an amount equal to the flat-rate addition. The amount refunded to him should be reduced by the amount of VAT which would have been repayable to him/her under SI No. 266 of 1993 (Repayments to unregistered farmers of VAT incurred on farm buildings and structures).
A person ceasing to trade should notify their Revenue District in order that the VAT registration number may be cancelled promptly. This is important to note, otherwise return forms and demands for estimated VAT liability will continue to issue automatically.
Revenue will also cancel a person's VAT registration if they have been registered in error, or they have ceased to be an accountable person. In certain circumstances a cancellation of registration will give rise to recovery by Revenue of the net VAT repaid to the person during the period of election.
14. Cancellation of a 'Holiday Home' election
Persons who elect to register for VAT in respect of the letting out of holiday accommodation must, in certain circumstances, pay a 'cancellation amount' to Revenue when they cancel their election to register. The cancellation amount is calculated on the basis of the amount of VAT deductible on the property used for the holiday lettings and the length of time for which the property was let before the cancellation. No cancellation amount is payable if the length of time involved exceeds 10 years.
The rule is confined to persons who let out holiday accommodation and incur capital development costs on which the VAT can be claimed back, have an annual turnover from the lettings of less than €37,500 and elect to register for VAT. The rule is confined to persons who elect to register for VAT in respect of the letting of holiday accomodation because they have an annual turnover of less than €37,500 and they reclaim the VAT incurred on the cost of capital development of the holiday accommodation.
The formula for calculating the adjustment amount is as follows:
A x (10 - B)
- A is the tax deductible (or which would have been deductible but for the operation of the transfer of business rules) on the immovable property
- B is the number of full years it was let
Persons who cancel their election after short periods of time are liable to repay proportionately more VAT than those who cancel after long periods.
Where the investor transfers the holiday property before the 10 years are up the person to whom the property is transferred is liable for the cancellation amount where applicable.
The above holiday home cancellation provisions do not apply to immovable goods acquired or developed on or after 1 July 2008.
15. Relief for stock-in-trade for newly registered traders
A person who has become liable for VAT may claim a credit, if any, for VAT suffered on the stock-in-trade
(i.e. goods for re-sale but not capital goods, tools) held at the beginning of the first taxable period for which he or she is registered. Where the rates actually charged at the time of purchase of the goods differ from the rates applying at the time the relief is being sought, the local Revenue District should be consulted in relation to the exact amount of VAT which can be reclaimed. No relief is available in respect of VAT on goods purchased prior to registration by a person supplying services.
16. Group registration
Where Revenue are satisfied that it is in the interest of efficient administration and that no loss of VAT is involved, they may treat a group of persons established in the State, at least one of whom is an accountable person, such as a number of companies which are closely bound by financial, economic and organisational links, as a single accountable person. An arrangement of this nature generally removes the necessity of issuing VAT invoices in respect of inter-group transactions (except in the case of certain property transactions).
While one person or company in the group will be responsible for compliance with all VAT requirements for the whole group, including lodgment of VAT returns/pay-ments with the Collector-General, each person or company in the group will be jointly and severally liable in the event that such compliance is not achieved. It is not a condition that every member of the group has to be an accountable person. Holding companies are permitted to be part of a group.
Any group wishing to adopt such an arrangement should apply to the local Revenue District. If, subsequent to the approval of a group registration, a new company is to be included in the group, permission for inclusion in the group registration must be obtained from the local Revenue District.
17. Who may not register in respect of supplies of goods or services?
A person carrying on only exempt activities or a person carrying on activities otherwise than in the course or furtherance of business may not register for VAT. However, a person carrying on exempt activities may be required to register in respect of intra-Community acquisitions of goods, and services received from abroad that are taxable where received from persons not established in the State (see paragraph 2). There is no provision for deductibility of VAT on purchases of goods and services by exempt persons.
18. Premises provided to mobile traders and promoters.
Where a 'premises provider' allows a mobile trader, not established in the State, to supply goods on the premises for a period of less than twenty eight days, he or she must provide details to the local Revenue District, including the following information, not later than fourteen days before the trader intends to trade on the land:-
- the name and address of the trader
- the dates on which the trader intends to trade on the premises provider's land and
- the address of the land
If these details are not provided, the 'premises provider' may be made jointly and severally liable for the VAT due by that mobile trader.
Where a premises provider allows a promoter not-established in the State to provide cultural, artistic, entertainment or similar services on the premises providers land then the premises provider is obliged to notify and furnish Revenue with certain information including the name and address of the promoter and details of the event not later than fourteen days before the event.
19. Option to tax (lettings)
The letting of property is exempt from VAT. However, the landlord may opt to tax the letting. The option to tax is letting specific. In other words, the landlord has the right to opt (or not to opt) to tax each letting. The option to tax does not apply to a letting of residential property or a letting between connected parties (see Guide to VAT on Property).
20. Liquidators and Receivers
A liquidator, receiver or other person may dispose of taxable assets of an accountable person in full or partial satisfaction of a debt or in the winding up of a company. In such cases the liquidator, receiver must register for VAT and pay over the VAT on such disposals. All goods forming part of the assets of the company, including immovable goods (land and buildings), are covered by this provision. (See Liquidators & Receivers (PDF, 68KB)
A farmer who engages solely in agricultural production activities is not obliged to register for VAT in respect of his/her farming activities. But if that farmer also engages in non-agricultural production activities, and if his/her turnover from those activities exceeds the appropriate threshold for registration, then his/her registration for VAT will apply to his/her agricultural production activities along with his/her non agricultural production activities.
For VAT purposes 'a farmer' means a person who engages in at least one of the agricultural production activities in the State listed in agricultural Services (PDF, 83KB).