Who should register for VAT?

What are the VAT thresholds?

Value-Added Tax (VAT) registration is obligatory when your turnover exceeds or is likely to exceed the VAT thresholds. The thresholds depend on  your turnover in any continuous 12 month period.

The threshold for distance- selling relies on your turnover in a calendar year.

 If the turnover is less than a threshold limit, you may elect to register for VAT.  

The principal thresholds are as follows:

  • €37,500 in the case of persons supplying services only.
  • €35,000 for taxable persons making mail-order or distance sales into the State.
  • €41,000 for persons making acquisitions from other European Union Member States.
  • €75,000 for persons supplying goods.
  • €75,000 for persons supplying both goods and services where 90% or more of the turnover is from the supplies of goods. However, while all goods and services are part of the turnover, the 90% does not necessarily include all goods sold.
  • The 90% figure does not include goods which you:
    • sold at the standard or reduced rates
    • and
    • manufactured or produced from zero rated materials.

A person, while not established in the state, needs to register and account for VAT if that person supplies:

  • taxable goods to ‘taxable customers’ in the State
  • or
  • services to ‘taxable customers’ in the State.

This applies irrespective of the level of turnover.

How is your turnover determined?

Your turnover figure may exceed the threshold limit, however, you may not be required to register for VAT.

For registration purposes, the turnover figure may be reduced by the amount of VAT paid on stock bought for re-sale.

You should use this reduced turnover figure to see if you can register for VAT. 

This adjusted turnover figure is used only for the purposes of determining your turnover for registration for VAT. 

Next: Persons required to register solely because of goods or services acquired from abroad