VAT is a tax charged on the sale of goods and services. The rate of VAT varies depending on the goods and services provided. The standard rate of VAT for goods is 23% and services is 13.5%.
When a businesses turnover in a calendar year exceeds or is likely to exceed the VAT threshold then they are required to register for VAT. If the turnover is less than the VAT threshold limit you may elect to register for VAT.
The principal thresholds are:
- €37,500 for the supply of services
- €75,000 for the supply of good
You can register for VAT through ROS (Revenue Online Services)
For an extensive list of VAT rates just click on the link below:
https://www.revenue.ie/en/vat/vat-rates/search-vat-rates/VAT-rates-database.aspx
VAT Rates:
23% VAT rate is called the standard rate of VAT. Popular items that fall into this bracket would be diesel, petrol, alcohol, electronic equipment and hardware items. (VAT registered business are not entitled to recover VAT on the purchase of petrol for running of vehicles).
13.5% VAT rate known as a reduced rate of VAT is for items including electricity, heating oil, building services (e.g. Plumber) hairdressing, restaurants and hotels.
9% VAT rate is called a special reduced rate for newspapers and sporting facilities.
4.8% VAT rate is a reduced rate of VAT specifically for agriculture.
0% VAT includes children’s clothes and shoes, tea, coffee, milk, bread, books, oral medicines for humans and animals, vegetable seeds, fertilisers and large animal feed.
VAT needs to be filed by the 23rd of the month following the end of each taxable period. Returns are due on a bi-monthly basis but revenue can authorise to change this to a four monthly, six monthly or an annual basis depending on certain criteria.
VAT on goods and services used for the purpose of your business can be reclaimed. Certain criteria needs to be followed which is set by revenue on what can and cannot be reclaimed.
This is just a very brief description of VAT. Each business sector can have a different criteria to follow depending on the service or product they provide. Feel free to contact me if you have and queries at info@cahillbookkeeping.ie