Accounting for VAT on received services (self accounting)
If you receive services from abroad for business purposes (both from the European Union (EU) and outside the EU), you may have to register and account for the Value-Added Tax (VAT) in the State. In these circumstances, you are regarded as the supplier of the services for VAT purposes.
There is no registration threshold for received services.
You must account for the VAT in your periodic VAT return on the invoiced amounts at the appropriate Irish VAT rate. You are treated as if you had made the supply yourself. This is known as self accounting.
You must provide your VAT number to the supplier otherwise you may pay VAT in the other Member State.
You may be entitled to reclaim the VAT in the same VAT return.
VAT-exempt businesses (for example, bookmakers, banks, insurance companies) who receive taxable services for business purposes from outside the State must register and account for Irish VAT on these received services.
Flat-rate farmers, fishermen and race-horse trainers
Flat-rate farmers, fishermen and race-horse trainers who register in respect of receiving such services are entitled to retain their unregistered status in respect of their farming or fishing activities.
Supplies of services to non-taxable legal persons
Non-taxable legal persons (for example, local authorities, State agencies and semi-State bodies) who already have a VAT number are required to provide their VAT number to suppliers from abroad and self account for received services.
Non-taxable legal persons, who do not have a VAT number are not required to account for VAT on services received from abroad.
- Example 1
Rory Ltd receives consultancy services from a German business and is charged €100,000.
Rory Ltd is required to account for the Irish VAT in its Irish VAT return as follows:
Consultancy fee on the invoice = €100,000
Rate of Irish VAT = 23%
100,000 @ 23% = €23,000
Amount of Irish VAT = €23,000
Rory Ltd includes the VAT on the consultancy service in their VAT return (T1 - Sales) and may be able to reclaim the VAT in the same VAT return (T2 - Purchases).
- Example 2
A County Council that does not have a VAT number, receives services from a business in France. As the council does not have a VAT number, they do not have to self account for VAT on the received service from the business in France.