Place of supply rules for services
General place of supply rules for services
There are two general place of supply rules, depending on whether the recipient is a business or consumer. However, these general rules can be overridden by certain exceptions or the use and enjoyment rules.
Supply of services to a business (B2B)
For supplies of business to business services (B2B), the place of supply is the place where the business receiving the services is established. This applies whether the business customer is in the European Union (EU) or not.
The location of the business customer to whom the services are supplied can be:
- where he or she has established their business
- where that person’s fixed establishment is located
- or
- in the absence of such place of business or a fixed establishment, the place where he or she has a permanent address or usual place of residence.
Generally, where the business customer is located outside Ireland, the Irish supplier will not charge Irish VAT on its services. Instead, the business customer will self-account for the VAT in their State.
- Example 1
XYZ Ltd, an Irish company, supplies a service to B Ltd. B Ltd is established in France and does not have a fixed establishment anywhere else.
The place of supply is France, the place where B Ltd is established. XYZ Ltd does not charge Irish VAT. Instead, B Ltd self-accounts for the French VAT in its own VAT return. No Irish VAT is due on this supply.
- Example 2
Seattle Inc, a US company, supplies a service to Tullamore Ltd. Tullamore Ltd is established in Ireland and does not have a fixed establishment anywhere else.
The place of supply is Ireland, the place where Tullamore Ltd is established. Tullamore Ltd must self account for VAT on the service supplied by Seattle Inc.’
- Example 3
LMN Ltd., an Irish company, supplies a service to Manhattan PLC, a company established in the United States. Manhattan Ltd does not have a fixed establishment anywhere else.
The place of supply is the United States, the place where Manhattan Ltd is established. No Irish VAT is due on this supply.
Supply of services to a non-business consumer (B2C)
For supplies of business to consumer services (B2C), the place of supply is the place where the supplier:
- has established their business
- has a fixed establishment
- or
- in the absence of such place of business or a fixed establishment, the place where he or she has a permanent address or usual place of residence.
There are certain specified services where the place of supply is outside Ireland if the customer is located outside the EU.
- Example 4
XYZ ltd., an Irish company, supplies a service to Karl, a non-business customer based in Germany. The service does not come within one of the exceptions or use and enjoyment provisions.
The place of supply is Ireland, the place where XYZ Ltd is established. XYZ Ltd must charge and account for Irish VAT on its supply to Karl.
Summary of the place of supply services rules
A summary of the place of supply of services rules is set out in the table below (subject to certain exceptions or use and enjoyment rules).
Summary of the place of supply of services rules
| Country of establishment of supplier | Country in which customer established | Status of customer | Place of supply | Person liable to account
for Irish VAT |
|---|
| Ireland |
Ireland |
Business or Private |
Ireland |
Supplier |
| Ireland |
Other EU State |
Business |
Other EU State |
No Irish VAT |
| Ireland |
Other EU State |
Private |
Ireland |
Supplier |
|
Ireland
|
Outside EU
|
Business
|
Outside EU
|
No Irish VAT
|
|
Ireland
|
Outside EU
|
Private
|
Depends on nature of the Service
|
Supplier (if VAT occurs)
|
|
Other EU State
|
Ireland
|
Business
|
Ireland
|
Business customer
|
|
Other EU State
|
Ireland
|
Private
|
Other EU State
|
No Irish VAT
|
|
Outside EU
|
Ireland
|
Business
|
Ireland
|
Business customer
|
|
Outside EU
|
Ireland
|
Private
|
Depends on nature of the Service
|
Depends on nature of the service – if taxable in the State – the supplier
|
Next: Exceptions to the general place of supply rules