What does this guide contain?
The guide provides you with practical VAT information for Ireland:
- Your VAT registration in Ireland
- Your VAT obligations TVA in Ireland
- The invoicing rules in Ireland
VAT REGISTRATION IN IRELAND
When do you have to register for VAT?
It is mandatory for your company to apply for VAT registration with the Irish tax authorities before starting your activities. Financial penalties may apply if the application for registration is submitted late.
What documents do I need to provide when I register?
If your company wishes to register for VAT in Ireland, it is essential to contact the Irish tax authorities. There is no need to contact the tax authorities in your country of establishment.
In particular, your company will need to submit the following documents:
- The VAT registration form(s) completed in the language of the country
- A copy of the articles of association
- An extract from the trade register
- A certificate of VAT liability
- Power of attorney (if using a fiscal agent)
- Proof of activity on the territory of the country concerned: a contract, an order form, etc.
The Irish tax authorities may require some of these documents to be translated into English.
How long does it take to get a VAT number?
If your file is complete, it generally takes one month to obtain the VAT number from the competent Irish tax office.
Is a fiscal representative necessary?
Irish VAT authorities may require non-European companies to appoint a fiscal representative. They have to do it through a VAT representative. This is a local company that will represent you to the local VAT authorities. He is responsible for the respect of all your VAT obligations, including those of which he was not aware. For this reason, he may require a deposit (e.g. a bank guarantee) from you before accepting the representation assignment.
European companies are not obliged to appoint a VAT representative. However, to facilitate their relations with the local tax authorities, they may appoint a proxyholder (agent) to carry out the tax formalities on their behalf. In this case, it is not necessary to issue a bank guarantee. The company remains solely responsible for paying its VAT debts.
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VAT OBLIGATIONS IN IRELAND
Is it necessary to keep VAT accounting ledgers?
Your company must keep ledgers sufficiently detailed to enable the application of VAT and its control by the Irish tax authorities.
When do you have to file a VAT return?
Monthly/Bi-Monthly/Tri-yearly/Bi-yearly/Yearly
Your company has to report its VAT position by filing periodical VAT returns on a two-monthly basis [2-month period - standard tax period]. Monthly reporting period can be opted for if your company is in a permanent repayment situation. Other tax periods are also available under specific conditions.
The VAT return must be filed electronically (via "ROS") before the 19th day of the month following the end of the taxable period to which it relates. If you both pay and file your return using ROS services the due date for your payment and return will be extended to the 23rd of the month following the tax period.
The VAT expert's eye
Member States set the duration of the taxable period at one, two or three months. However, they may set different periods provided they do not exceed one year. The VAT return must be submitted within a period to be determined by the Member States. This deadline may not be more than two months after the end of each taxable period (Art. 250 of the VAT Directive).
Do I have to submit an annual return?
Your company has to file a yearly Statement [Return of Trading Details - RTD]. The RDT Form details purchases and sales for the year, broken by VAT rate. The statement should be filed by electronic means via "ROS" together with the last VAT return of the year.
The VAT expert's eye
Member States may require the taxable person to file a return containing all the data referred to in Articles 250 and 251 and concerning all transactions carried out during the previous year. This return shall include all the information necessary for any adjustments. They authorize, and may require, the return to be made by electronic means under conditions which they determine (Art. 261 of the VAT Directive).
What is the deadline for paying Irish VAT?
The company must pay the VAT due no later than the 23rd day of the month after the end of the tax period to which it relates. Where VAT becomes payable but is not paid, simple interest is chargeable at the rate of 0,0274% per day, or part of a day during which the amount remains unpaid.
Interim payments are not required in Ireland. However, taxpayers choosing to pay their VAT liability by way of direct debit instalments and filing annual VAT returns must pay monthly interim payments.
The VAT expert's eye
Every taxable person who is liable for the tax must pay the net amount of VAT when filing the VAT return. Every taxable person who is liable for the tax must pay the net amount of VAT when submitting the VAT return. However, Member States may set a different deadline for the payment of this amount or collect instalments (Art. 206 of the VAT Directive).
When should the intra-EU statement be filed?
The recapitulative Statement [ESL] must be filed on a monthly basis.
Taxpayers can however opt for filing the statement on a quarterly basis provided the intra-EU transactions do not exceed a quarterly threshold of € 50.000. VIES Return must be filed by electronic means via "ROS" to Irish VAT authorities before the 23th day of the month following the reporting period [month/quarter] to which it relates.
The eye of the VAT expert
A recapitulative statement is drawn up for each calendar quarter within a period and according to procedures to be determined by the Member States. However, Member States may provide for recapitulative statements to be submitted on a monthly basis. Member States may allow, and may require, recapitulative statements to be submitted electronically under the conditions they determine (Art. 263 of the VAT Directive).
INVOICING RULES IN IRELAND
Does the invoice have to include VAT? Reverse Charge?
As a supplier of goods or services, your company is normally obliged to issue an invoice with VAT to its customer. This is the general rule. However, there are many derogatory situations which transfer this obligation to pay tax to the customer himself. These situations are known as "reverse charge" situations.
The special reverse charge rules have been introduced in Ireland for foreign companies:
For supplies of goods:
Reverse charge mechanism is not applicable to major domestic supplies of goods (except for specific supplies of goods with installation and some other specific items).
For supplies of services:
Reverse charge mechanism is applicable to major domestic supplies of services (with some exceptions).
What are the mandatory mentions on an invoice?
The VAT Directive lays down the minimum information that you must include on your invoice. In some cases, countries may add additional compulsory information. Particular attention should be paid to the conversion rates when the currency used on the invoice is not that of the country in which the transaction takes place, and to the specific statements justifying the legal reason why VAT is not charged.
What VAT rate should be mentioned on an invoice?
Ireland has 4 differents VAT rates :
- Standard rate : 23%
- Intermediate rate 1 : 13,5%
- Reduced rate 2 : 9%
- Reduced rate 3 : 5%
VAT REFUNDS IN IRELAND
How can I recover VAT in Ireland ?
There are several methods to obtain refunds of Irish VAT. The practical formalities for reclaiming foreign VAT will differ depending on whether or not your company is established in Europe and/or is identified for VAT in Ireland :
- If your company has a VAT number in Ireland, it will have to submit a refund application in the form and within the timeframe required by local regulations. Any VAT credit cannot be carried forward. Refund is done immediately [generally within three weeks after filing the return]. Irish VAT Act provides for payment of interest on refunds of VAT to a claimant in two circumstances, i.e. when there is a mistaken assumption in the operation of the tax made by Irish VAT authorities or where there is a delay of more than 93 days in processing a fully completed claim. The rate of interest is 0,011% per day.
- If your company is established in a European country and does not have a VAT number in Ireland , it will have to apply for a VAT refund electronically from its country of residence, in the form and within the time limits required by Directive 2008/9.
- If your company is established outside Europe and does not have a VAT number in Ireland , it may have to appoint a tax representative to submit its refund application in the form and within the time limits required by the 13th Directive.
The VAT expert's eye
If you have submitted an invoice that does not meet the regulations of Sec. 14 Par. 4 Umsatzsteuergesetz (i.e. VAT Act), and VAT is therefore not refundable, you have the possibility to have the invoice corrected by the invoice issuer and to reclaim the VAT from the corrected invoice.
Is Irish VAT recoverable on all expenses?
VAT incurred on purchases, imports or intra-Community acquisitions of goods and services can be reclaimed by a foreign company provided that these expenses are for taxable activities and provided that the appropriate documentation is available.
However, no input VAT can be recovered on any of the following expenses:
- Expenditure incurred on food or drink, accommodation except in certain cases.
- Entertainment services in certain cases.
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