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Basic principles of accounting for VAT in Ireland

Basic principles of accounting for VAT in Ireland

Ireland is an excellent country to start or expand a business. For a successful business, you need to be familiar with the country’s tax system. In particular, you need to know how VAT is accounted for. What does it look like VAT in Ireland? Here are some useful tips on the subject.

Registration for VAT purposes

All foreign companies that provide services that are subject to Irish taxation may be required to account for VAT. The requirement for a foreign company to register involves the assignment of an individual VAT number. It will then be possible to register and report all types of transactions. This rule may also include imports. The tax authority in Ireland (called the Revenue Commission) is responsible for administering the VAT system. This includes issuing regular notices relating to the daily VAT compliance rules.

Different VAT rates in Ireland

Ireland uses a basic rate of 23% and reduced rates: 13.5%, 9%, 4.8% and a zero rate. The standard rate applies to all goods not covered by other regulations. The 13.5% VAT rate applies to, among others, certain food, pharmaceutical and agricultural products. A 9% rate applies to newspapers, magazines and cultural events.

No VAT threshold for traders

Ireland has no VAT registration threshold for non-tax resident traders, except for the sale of goods and the provision of services to Irish customers via the internet. The obligation to register for VAT in Ireland exists when, among other things, importing goods, buying and selling goods within the country, maintaining a warehouse of goods before onward sale of products to local businesses, and organizing live events and conferences with entrance fees.

Timely accounting for VAT

VAT in Ireland must be paid by the 19th or 23rd of the month following the end of each tax period. The VAT return must also be submitted to the Irish Inland Revenue by this date. Basic tax period is a two-month period beginning on the first day of January, March, May, July, September and November. However, the Inspector General may also authorize a four-month, six-month or one-year tax period. A VAT return must also be submitted to the Irish Inland Revenue by this date. Law in this country does not provide for the concept of a fiscal representative. Hence, there is no need for companies that are not tax resident to appoint such a representative.

Cooperation with the tax office

Familiarity with the tax system, including VAT in Ireland, allows you to develop your business freely, without fear of penalties imposed by the Inland Revenue. However, regulations can change dynamically. Therefore, it is worth considering cooperation with a specialized tax office, thanks to which every entrepreneur will be sure that activities carried out in Ireland will always be fully compliant with the current regulations.

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