What is the standard VAT rate in Ireland?

The standard VAT rate in Ireland is 23%. There are also reduced rates: 13.5% (construction, tourism, food service), 9% (newspapers, sporting events), and 0% (exports). Some goods are exempt from VAT entirely.

What is the VAT registration threshold in Ireland?

For services, the annual threshold is €37,500. For goods, the threshold is €75,000. If your turnover exceeds these in any continuous 12-month period, you must register for VAT. You can also register voluntarily below these thresholds.

How often do I need to file VAT returns in Ireland?

Most VAT-registered businesses file returns bi-monthly (every 2 months). You must submit your return and pay any VAT due by the 23rd day of the month following the end of the VAT period. Some businesses may qualify for annual or quarterly filing.

Can I reclaim VAT on business expenses in Ireland?

Yes — VAT-registered businesses can reclaim VAT on most business-related purchases including stock, equipment, professional services, and overheads. You cannot reclaim VAT on entertainment expenses, passenger cars (with limited exceptions), or goods used for non-business purposes.

What is the cash accounting scheme for VAT?

The cash accounting scheme allows businesses with annual turnover under €2 million to account for VAT on the basis of payments received and made rather than invoices issued. You only pay VAT when your customer actually pays you.

VAT Guide \u00b7 2026

VAT Guide Ireland 2026: Rates, Registration, Returns & Key Schemes

Value-Added Tax (VAT) is Ireland's second-largest tax revenue source. The standard rate is 23%, with reduced rates of 13.5% and 9%. Understanding VAT registration thresholds, return filing, and reclaim rules is essential. Use our Contractor Tax Calculator to estimate your VAT obligations.

VAT Rates in Ireland (2026)

Ireland applies multiple VAT rates depending on the type of goods or service. Using the wrong rate can lead to underpayment penalties or delayed refunds.

Rate	Applies To	Example
23%	Most goods and services	Electronics, professional fees
13.5%	Construction, tourism, food service	Hotels, restaurant meals, building work
9%	Newspapers, sporting events	Gym memberships, magazines, events
0%	Exports, most food, children's clothing	Exported goods, basic food items
Exempt	Finance, insurance, education, healthcare	Bank charges, insurance, school fees

VAT Registration Thresholds

You must register for VAT if your turnover exceeds the relevant threshold in any continuous 12-month period.

Goods (Supply)

€75,000

Annual threshold

Businesses selling physical goods or products.

Services

€37,500

Annual threshold

Consultants, contractors, and professionals.

How VAT Returns Work

VAT returns are typically filed bi-monthly through ROS. The return calculates the difference between output VAT (charged to customers) and input VAT (paid on purchases).

Example: VAT Return (2-Month Period)

Sales (standard rate)	€50,000
Output VAT @ 23%	€11,500
Purchases (standard rate)	€15,000
Input VAT @ 23%	€3,450
VAT payable to Revenue	€8,050

Due by 23rd of month following period end

Bi-monthly return schedule

Jan-Feb: due 23 March
Mar-Apr: due 23 May
May-Jun: due 23 July
Jul-Aug: due 23 September
Sep-Oct: due 23 November
Nov-Dec: due 23 January (next year)

VAT Schemes for Small Businesses

Cash Accounting Scheme

For businesses with turnover under 2m. You account for VAT when payment is received or made, not when invoices are issued. This helps cash flow.

Flat-Rate Scheme for Farmers

Unregistered farmers can charge a flat-rate addition (5.4%) on sales to VAT-registered persons as compensation for VAT on farming inputs.

Annual / Quarterly Returns

If your annual VAT liability is under 14,400, Revenue may allow quarterly filing. Under 3,000, you may qualify for annual returns.

VAT on Imports and Exports

Goods imported into Ireland from outside the EU are subject to VAT at entry. Exports to customers outside the EU are zero-rated.

Scenario	VAT Rate	Who Accounts
Export to non-EU	0%	Supplier (zero-rated)
Export to EU business	0%	Reverse charge by customer
Import from non-EU	23%	Importer at customs clearance
Import from EU	23%	Reverse charge on VAT return

Penalties for Non-Compliance

xLate filing: Up to 4,000 penalty. Daily interest of 0.0274% on late payments.
xIncorrect returns: Penalties from 5% to 100% of underpaid VAT.
xFailure to register: Backdated registration plus interest and penalties.
xRecord keeping: Keep VAT records for 6 years. Penalty up to 3,000.

Frequently Asked Questions

Can I register for VAT voluntarily below the threshold?

Yes — you can voluntarily register for VAT even if your turnover is below the thresholds. This is common if you have significant business expenses and want to reclaim input VAT, or if you supply to VAT-registered customers who prefer VAT-registered suppliers. Once registered, you must charge VAT on all taxable supplies and file returns.Estimate your contractor tax ->

What is the VAT reverse charge mechanism?

The reverse charge shifts responsibility for accounting for VAT from the supplier to the customer. It applies to: construction services (subcontractor to main contractor), waste disposal services, and cross-border B2B services within the EU. The customer accounts for both output and input VAT on the same transaction, resulting in a net nil position.Estimate your contractor tax ->

Can I reclaim VAT on business travel expenses?

VAT on business travel (hotels, flights, car rental) is generally reclaimable if for business purposes. VAT on entertainment (client meals, events) is NOT reclaimable. VAT on staff meals may be reclaimable if properly documented. Keep all receipts with clear VAT breakdowns.Estimate your contractor tax ->

What records must I keep for VAT purposes?

You must keep: sales invoices (showing VAT number, rate, and amount), purchase invoices, bank statements, cash receipts, import/export docs, and VAT control accounts. Records must be kept for at least 6 years and may be requested during a Revenue audit.Estimate your contractor tax ->

What if I issue a VAT invoice with the wrong rate?

If you overcharge VAT, you must account for the full amount charged. If you undercharge, you are still liable for the correct VAT. Issue a credit note and corrected invoice. For errors under 300, you can adjust on your next return.Estimate your contractor tax ->