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Charging VAT on goods

  1. Overview
  2. What is a supply of goods?
  3. What are the place of supply rules for goods?
  4. Goods diverted to a private or exempt use (self-supply)
  5. VAT on gifts, advertising goods, samples and replacements
  6. Special rules for business premises and landowners
  7. When is a supply of goods not taxable?

Goods diverted to a private or exempt use (self-supply)

A self-supply of goods occurs when an accountable person diverts goods to private or exempt use.

You would have normally reclaimed the Value-Added Tax (VAT) on the original purchase of these goods. In this circumstance you are obliged to return this VAT to Revenue.

  • Example 1

    A jeweller takes a watch from stock-in-trade for their own personal use in March 2021:

    Private use
    DetailsTotal
    Cost of watch, VAT inclusive €1,230
    VAT element included at 23% €230

    The jeweller would normally be entitled to a VAT deduction. However, the jeweller must now account for the VAT on the diversion of the goods to a private use.

    The jeweller is obliged to account for the self-supply. This process is completed by increasing their VAT on sales (T1) by €230 in the March to April 2021 VAT return.

  • Example 2

    A builder uses building materials to refurbish or repair their private house to the value of €3,690 in June 2021:

    Private use
    DetailsTotal
    Cost of materials VAT inclusive €3,690
    VAT element included at 23% €690

    The builder would normally be entitled to a VAT deduction. However, the builder must now account for the VAT on the diversion of the goods to a private use.

    The builder is obliged to account for VAT on the self-supply. This process is completed by increasing their VAT on sales (T1) by €690 in the May to June 2021 VAT return.

  • Example 3

    A car dealer diverts a car from stock-in-trade for use in their taxi business in May 2021

    Exempt business use
    DetailsTotal
    Cost of vehicle VAT inclusive €28,290
    VAT element included at 23% €5,290
    VAT credit claimed on purchase as stock €5,290

    The car dealer would normally be entitled to a VAT deduction. However, the car dealer must now account for the VAT on the diversion of the goods to an exempt use. For example their taxi business.

    The car dealer is obliged to account for VAT on the self-supply. This process is completed by increasing their VAT on sales (T1) by €5,290 in the May to June 2021 VAT return.

Next: VAT on gifts, advertising goods, samples and replacements

Published: 18 October 2023 Print this page

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