How to account for VAT

How do you complete a VAT3 return?

The VAT3 return records the Value-Added Tax (VAT) payable or reclaimable by you in your taxable period. The return should be completed as follows:

T1 – VAT on sales

This figure is the total VAT due on your:

• supplies of goods and services
• intra-Community acquisitions of goods
• received services as appropriate.

T2 – VAT on purchases

This figure is the total VAT incurred by you on:

•  goods and services insofar as they relate to your taxable supplies and qualifying activities.
• intra-Community acquisitions of goods
• received services
• flat-rate addition.

The T1 and T2 figures may be adjusted where a credit note is issued or received.

T3 – VAT payable

VAT is payable to Revenue where the T1 figure is greater than the T2 figure. The amount payable is the difference between the two figures.

T4 – VAT repayable

VAT is repayable to you where the T2 figure is greater than the T1 figure. The amount repayable is the difference between the two figures.

If you have no VAT payable or reclaimable in the tax period, the VAT3 must be returned marked zero at T1, T2 T3 and T4.

Please note: Do not insert 'nil' on any line.

E1 – Intra-EU supplies of goods

This is the total value of goods sent to customers in other EU countries.

E2 – Intra-EU acquisitions of goods

This is the total value of goods received from suppliers in other EU countries.

ES1 – Intra-EU supply of service

This is the total value of services supplied to customers in other EU countries.

ES2 – Intra-EU acquisition of services

This is the total value of services received from suppliers in other EU countries.

Please see further guidance for information in respect of obligations to file electronic VAT returns and make payments via ROS.

Next: Repayment of VAT