ohh Lord, I didn't realise I could claim back VAT on my business expenses even tho I do not meet the VAT threshold. Thanks for the info, I will register for VAT straight away. Thannks a million.
Wow absolutely brilliant video. Don't know if I was noticing this correctly but the voice sync seemed a bit off but that has nothing to do with the qualilty explaining that you gave. Thanks a million.
Hi Mark, Can you please shed some lights on RTD(Return of trading details) Process, Requirement and what form we have to fill? I will much appreciate all your help! Thank you
Hi Taha - thanks for your question. The long answer is, it depends: - selling goods to a company with EU VAT number = no VAT charge - selling goods to consumer/person in EU = you usually need to register your business there and charge VAT at the rate applicable in that country - selling services to a company with EU VAT number = no VAT charge (they will reverse charge and self-account for it themselves) - selling services to consumer/person in EU = usually you would charge your customers VAT at the rate that applies in your home country Of course with all things, there are some exceptions and each case must be looked at specifically. Hope this helps!
Hi Mark, Thank you for you videos, it really helps , are you able to make an quick video about Postponed accounting for VAT section ? and what does it mean? thank you for your time and all help
Under "Postponed Accounting" businesses that import from the UK (excl. NI) can declare and reclaim the VAT amount on the same return rather than paying VAT at the port and claiming it in the VAT return. E.g. If I buy goods from the USA or UK, VAT is levied at the point of entry (the port) and I have to pay it immediately. I can claim it back in my next VAT return but I'm out of pocket until then which presents me with a cashflow problem. Under postponed accounting, I can tell them not to levy VAT at the port but instead account for it in my VAT return using the reverse charge basis instead.
assuming the registration was accepted and the start date was registered as early October for bi-monthly returns, your next VAT return is due to be filed by 19 November (or 23 November if filing on ROS.ie)
Hi! Thank you for the video. I’m wondering… can you claim vat back on things if you register after the expense was made? For example I’m currently not VAT registered but I am going to purchase a new laptop for my business needs, to claim the vat back do I need to register prior to purchasing the laptop? Finally, in order to get that VAT back, would I just go on the form that you’ve demonstrated and have that laptop as an expense and then it would say I’m owed x amount? Thank you again :)
Hi David, the rule of thumb here is that if the item to which the expense relates is used for a sale which is VATable then you can claim for the VAT back (e.g. I might purchase cotton, register for VAT and then sell t-shirts with VAT in price, I can claim the VAT on the cotton back). With the case of a laptop you may be able to claim a portion of VAT back over its useful life.
Hi Mark, If the Irish company sells online on a VAT margin scheme second hand goods, what about the VAT paid in term of shipping labels and selling commission at 20% to Backmarket which is based in France, Where do I put such VAT while filling VAT3 return?
Thank you for that informative video...One question...how do I deal with funds received from a principal contractor ( construction sector ) where vat has been accounted for by the principal contractor . Are you aware of this accounting practice that exists since 2008...Many thanks..
In Ireland, you can only claim VAT from Revenue if that VAT was paid to Revenue. Outside the EU, you may need to register for VAT in the country you imported from to reclaim VAT, but it is quite complex.
Great video thanks. I'm trying to set up ROS online and am having an issue with the first step. the error is "Either the tax type you have entered is not valid for this registration number or you have entered the registration number incorrectly" my PPS is correct so I think its the tax type, my previous tax type was PAYE- IND but there is no option for this in the drop down, only option is PAYE-EMP which is incorrect and most probably why I'm getting the error. Any advise offered is very much appreciated. Thanks.
Hi Francis, are you setting up ROS for Income Tax purposes? If so, you need to select the 'Income Tax' option (FYI - PAYE-IND is for employee payroll taxes and PAY-EMP is for employer payroll taxes)
@@MegaFraner Hi Francis, if you are an employee (i.e. you are not self employed / don't own your own business) you don't register on ros.ie - instead you need to register on www.ros.ie/myaccount-web/ - this is the portal for employees. Hope that helps!
Hi there. Thank you very much for this great tutorial. In "E2" field total goods from other eu countries means goods purchase for resale + goods purchase for business purposes such as envelopes using for packaging stuff to customers or just goods for resale? Thanks in advance.
@@TheAccountingChannel Thank you very much for your kind answer. I have one more question if you dont mind. For example, I buy 1000 euro goods for resale from German sole trader who is not VAT registered. Do I need to put this 1000 euro to E2 field?
Thank you for the video! I have one question, we are a startup company we are still not registered for VAT. We are looking to buy some goods from another EU country, they are selling the goods with a VAT and they can sell without VAT if we have VAT number as a company. In this situation do we need to pay VAT in both countries?
Hi Valon, thanks for your query. At present, because your business is not VAT registered, you are being treated as a "consumer", meaning the EU supplier must apply the VAT rate that applies in Ireland to you. If you register for VAT, you are then a "business" customer, and under EU VAT rules, the reverse-charge mechanism ("self-accounting") applies, which means the VAT rate charged is 0%. You don't need to register for VAT in their country, only record the transaction for VAT purposes in Ireland
@@TheAccountingChannel On this point, if your business is not VAT register, I understand you don't charge VAT in your home country to the consumer, but if you export to another EU country, will the shipping carrier try to charge the consumer VAT or not? seeing as you can't do it in their basket due to not being VAT registered.
Mark, I am still confused. I understand why you didnt charge the germany company any VAT in the vat 3 example, but the italian company you bought from, they didnt write any vat value on their invoice, but you self account for it, but why don't you actually have to pay any vat on that purchase from italy, because we made it neutral by adding it as a vat sale and a vat expense, I understand this is self accounting , but the end result is nobody pays any vat for this italian company's widgets . am I right?
@@TheAccountingChannel Thanks Mark, thats very helpful, the last Question is , if I get a Bill for a service in the EU from a private person, and they are not vat registered, do I have to account for Vat still on vat 3 return in Ireland, even though the private consumer is not vat registered in their EU home country?
@@fitz5000xx hi John - in this case they are VAT exempt (rather than 0% rated) so you would NOT need to self-account or reverse charge the transaction.
@@TheAccountingChannel Thats great , thanks, my final scenario is, if a private citizen from Outside the EU , say in the USA or Australia, designs a web app for my company, and they charge me 2000 Euros for example, and they are not vat registered in their home country, am I liable for any reverse vat in this case to the state here in Ireland? any info appreciated. best regards. john
@@fitz5000xx very hard to say really as VAT is only in the EU (other jurisdictions outside EU have their own Sales Tax regimes). I would reverse charge it just to be safe.
Thank you for the video! I have a question: if VAT returns of the past havent been submitted, can they just be submitted "now for then" for all missing periods? thank you very much!
hi Leonardo, technically no, you would need to submit a return for each period where you are registered for VAT. There is a self-correction rule though that states: "For bi-monthly/quarterly/half-yearly remitters of VAT, if the net underpayment of VAT for the period being corrected is less than €6,000, the amount of the tax can be included as an adjustment on the VAT return to be submitted for the bi-monthly/quarterly/half-yearly period immediately following that in which the error was made." See more info here (page 105): revenue.ie/en/self-assessment-and-self-employment/documents/code-of-practice-revenue-audit.pdf
Very informative video Mark,would like to know how would you pay if you sell through dropshipping or Amazon FBA,how does the VAT apply and if you sell in the US or outside EU?
@@TheAccountingChannel Is this the same for services or just goods? With regards to an Irish based sole trader selling services to businesses in the US?
If you sell ZERO goods in Ireland or to Irish customers but are a sole trader (resident in Ireland) selling goods through Amazon USA to USA customers only (goods bought in China shipped directly to USA) does this mean 0 is the ‘qualifying’ income for VAT threshold purposes correct? VAT registration is important for me to prevent vat charges on services provided by a USA business (amazon). Is vat registration possible? would appreciate a steer on both questions
Hi Sean, there is no such thing as reverse charge outside EU - this only applies when selling to VAT registered companies in other EU jurisdictions. However, you do need to "self-account" for purchases both from the EU and outside EU on your VAT return.
Hi great informative video for a newbie.. As an artist do I have to charge vat on the products I sell, ie I create a drawing and transfer it to a metal shape. I then sell the finished medallion to a customer.
Hi Silver Sheriff - we have a few clients who are artists. Revenue's advice regarding VAT and works of art is as follows: WORKS OF ART ( Works of art ) Rate Reduced rate: 13.5% Remarks Schedule 5 Works of art are liable at the Reduced rate at importation & in circumstances of Section 48(1). However, where sold under the margin scheme or special auction scheme, such works are liable at the Standard rate on the margin. Other circumstances rate varies. Value-Added Tax Consolidation Act 2010 (VATCA 2010) Ref Section: 46(1)(c) Schedule: 3 Paragraph: 23
Hi, just a quick question, does a partnership fill out the vat 3 as well? We did not start trading yet, but we have a few expenses on the equipment, which is quite a bit of vat. We also know that we will have to charge 23% after registration for every good sold. But is this tax reclaimable if we make below 35k?
hi GLZ, so all businesses (sole traders, partnerships, companies) have to register, charge, report (VAT3) and remit VAT if they breach the VAT registration thresholds. A business can voluntarily register for VAT before meeting these thresholds. Once registered for VAT, you can reclaim VAT on purchases that are used to make VATable sales.
@@TheAccountingChannel thank you for the fast reply, I have booked a short meeting with you over online for this Monday (Elynx Clothing). I am looking forward to this. Once again thank you for your great information and knowledge!
@@greenlightzone no problem GLZ. For consultation service specifically relating to your business we ask people to purchase this from us here: firstaccounts.ie/product/advice-sessions/ - otherwise if you would like a quote for accounting service, that is a free 15 minute conversation which can be booked here: firstaccounts.ie/arrange-discovery-call/
Very helpful! Just a question, if you volunteer to be registered for VAT even though your turnover for the 12month period is below the threshold of 75k. Are you obliged to charge VAT on the sells of goods? or can you decide not to charge as long as you don't claim back the VAT paid on the purchase of those goods. I wonder if the charge of VAT becomes mandatory just because you are now registered for it. Many thanks!
Hi Douglas, thanks for your question. Once you register for VAT (either voluntarily or mandatory), you must charge it on all invoices and remit this VAT to Revenue.
Thanks Mark for a very informative video. I have a question. If I'm selling products from a Shopify store and I don't actually physically ever handle these products, do I have to pay any additional tax from the sale of the product? So lets say I sell something for €30 and I pay my supplier €15. Do I have to pay any tax from that €30 I take from the sale? Thanks so much.
Hi Path - we cannot provide an definitive answer on this unfortunately as it depends on a lot of factors e.g. where the good is coming from, where it is going to, where your business is located, if being sold to a business or consumer etc.
there are loads of RUclipsrs producing UK VAT related content, best to seek those out (they would be more familiar with the UK tax laws). We do plan on creating videos on UK VAT from an Irish business perspective though in the near future! :)
@@TheAccountingChannel Yes... I am asking as an Irish business. I hope these calculations do not refer to the UK at all... I simply buy a product in the UK without VAT and I am not at any stage obliged to "self-assess" for my VAT. I do take into accounts only net value... True or false? Tnx
Thanks for this video, super helpful! If I wanted to be a sole trader in Ireland on the side and don't expect to meet the 37K threshold to register for VAT is there anything else that needs to be done to start trading other than register for income tax? Can I just issue invoices to Irish and EU customers without listing a VAT number? Would that mean without VAT there is no reporting every two months but just annual personal income tax on what was earned?
@@TheAccountingChannel that is great, thanks for confirming! There's some confusion that has come up if I were to invoice for my services with an EU business outside of Ireland. What I'm hearing is they're looking for a VAT number to be listed on the invoice. If you're not registered for VAT do you need to mention any tax reference number or other information on the invoice for them to process it correctly in their accounting?
Thank you for your video! In Ireland when quoting prices of services, is it normal to include VAT in the negotiations or is VAT assumed and expected as an extra on the invoice?
Hi Diogo, in B2B (business to business) transactions it is normal to quote "ex-VAT" or without VAT, as VAT can be recovered by a business, it is essentially not considered a cost. Just be sure to say "€xxx plus VAT". However, if you are selling to consumers, you should quote a price which includes VAT (as it is a cost they cannot recover).
May I ask you a question please. As a small sole trader that's not vat registered as I am just starting out. Will i have to pay VAT to my suppliers in the UK? - or the other way around is the UK wholesaler obligated to charge me VAT. Thanks
If you are not registered for VAT you are treated like a consumer. Pre-Brexit this would mean that you would have been charged VAT (and have to pay it) for goods/services purchased from the UK, however post-Brexit they will not charge you VAT, and you are supposed to self-account for this (for service) and for goods most likely you will get a VAT bill from Revenue at the point of entry in Ireland.
I have question,,,,,as small sole trade ,,,, can I ofert the services ,to hospital ,pub, houses , and big company like sub contracts,,,and charge it ,,,?
this really depends and you will need expert advice. It is distance selling and there are different thresholds depending on the country. It's too complex to go into here unfortunately.
@@mariorainy If you sell goods and send them to consumers in another EU country, you usually need to register your business there and charge VAT at the rate applicable in that country - unless the total value of your sales to that country within the respective tax year falls below the limit set by the country. Here are the threshold values for each country: ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/vat/traders/vat_community/vat_in_ec_annexi.pdf
Hi Taha, thanks for your comment. At the moment, the situation with Brexit makes accounting for VAT quite difficult. It is something I'm currently researching (as all accounting firms are!) and I am going to make a video about it soon.
HI Mark, thanks for a great video. I have a question in relation to the vat threshold for a partnership business. My husband and I run a photography business in Ireland and we would like to know if the threshold is €37.500 or if that doubles since we are married and have a partnership company. We are currently registered for VAT but our. turnover has since taken a hit due to COVID-19. so we are thinking of unregistering. Thanks a mil.
Hi Jessica - the thresholds are per business (I'm assuming yours are both under the same tax registration number), so your threshold is €37,500. If you both had totally separate sole trades, you would each have the €37,500 threshold. You cannot deregister unless the total turnover over the last 12 months is less than €37,500. Important to note that VAT on claimed expenses can be clawed back also.
I have just started selling online and I buy products from China and sell in diff eu countries do I need to register for VAT as my sales are let's say 20k annual ? thanks
Different types of food have different VAT rates. Presently the VAT rate for restaurants is 9% (during pandemic) but normally it is 13.5%. www.revenue.ie/en/vat/vat-rates/search-vat-rates/R/restaurants-food-and-drink-for-human-consumption-.aspx
Hi Mark, Thank you for a very helpful video. I am setting up a small business. I buy vintage clothing from within the EU for retail sale here. I wondering what are my VAT options. I know that I can wait for the threshold before registering for VAT. My EU suppliers are asking for my VAT number. I am a little confused. Any steer in this would be appreciated.
Hi Kammkmca, it's normal that they are asking for a VAT number because then they do not have an administrative task of registering for VAT in Ireland themselves (assuming they breach the distance sales threshold for Ireland). This would be a big pain for them - conversely if you are VAT registered they only need to charge 0% reverse charge. It might be easier for you to just register for VAT, however, this will increase your sales price and you will have the added burden of accounting and reporting VAT.
@@TheAccountingChannel Hi Mark , Thank you for your most helpful and prompt response. I am just starting off and I have not registered for VAT as I have not reached the threshold until E35,000 (online/distance retail sales). I have purchased vintage clothing goods from an EU member state supplier and have paid VAT to the supplier on the purchase. Having received the supplies from my EU supplier am I liable to pay VAT again to Irish revenue at the standard rate (23%). (If so, this would seem that I would be paying VAT twice on the same products)
@@kaamkmca Hi kaamkmca - the threshold for VAT registration for goods is €75,000 (if your business is based in Ireland) - the €35,000 threshold is for businesses based outside Ireland. You can register for VAT voluntarily before hitting the €75k threshold. If your supplier charges VAT on goods, it is probable that you won't pay VAT on it again.
@@TheAccountingChannel Hi Mark, Thank you once again. What you say makes common sense to me. I find it difficult to comprehend the language sometimes on the Revenue website. It is new to me. I have watched all your videos and I have learned hugely from them. I look forward to your next videos. Thanks once again!
Hi again, quick question here, I see how you managed the expenses done outside Ireland (in Europe) where you have to put the 23% here in Ireland. Now, what about if my expenses come from China, should I do the same?
Hi again Stefano, sorry for late response! So if you buy goods for business use from a supplier based outside the EU, your business would pay VAT at the point of import. If you buy services for business purposes from a supplier based outside the EU, you should usually pay VAT at the applicable rate (probably 23%) as if you had supplied the service yourself (using the reverse charge procedure). So in essence you "pretend" that the supplier charged you VAT. You can usually deduct this amount later on when you make your VAT declaration.
The IT contractor in Ireland doesn't charge VAT to the US company. You need to register for VAT once you breach the €37,500 threshold in any 12 month period.
@@TheAccountingChannel once I registered, how should I notify Revenue that I am charging 0 VAT. I presume it's through VAT returns is it? Or I would need to give them some additional documents?
If we buy product from china and sell in USA (products will not touch the Irish land) but revenue come to Irish ltd, do we still have to pay VAT or not?
@@TheAccountingChannel Using this as an example, if you are a non-resident and revenue comes to Ireland and is wired out (but with no employees or local vendors etc), will you still maintain the 12.5% tax rate ? If not, how to maintain that? Do you offer strategies as part of your consultancy?
@@pamelaj.s.2522 presuming you have a limited company incorporated in Ireland and that you are its only director, the company could technically be tax-resident in the country where you live (depending on the Double Taxation Agreement Ireland has with the country you reside in). In short, this would mean that the company is not tax resident in Ireland and cannot avail of the 12.5% rate, and would need to abide by local corporate tax laws. As you can imagine it is extremely complex, and you would need a specialist tax consultant to help you structure it properly (not us I'm afraid!)
hi sourav, we can help with any accounting, bookkeeping or tax related aspects of your new business only. Typically these services cost around €250/month (ex VAT). You can arrange a Discovery Call with us here to get a suitable quote: firstaccounts.ie/arrange-discovery-call/
Hi Mark, does your business offer any form of training? I'm new to Irish VAT and I'm clueless. I've just been dropped in at the deep end with my new company and I don't want to get it wrong.
Thank you for that info! I have a question about selling digital products from Ireland. I have done a little research but I'm still not getting my head around it! 🤯 Do I have to charge VAT on digital products even if I'm not even near the threshold? I have read about the €10,000 threshold but I'm so confused by it all! Etsy collect VAT on digital product sales even though im not VAT registered. I have read all their information on this already. I have also downloaded revenues documents on the one stop shop but nothing has clicked! Sorry for the longness and thank you in advance 🙂😁
Great video. I'd love to have a chat, I'm a RUclips growth specialist. Would love to see if I can help you in exchange for some simple questions about VAT for RUclipsrs. I'm making a decent amount through adsense and trying to make sure I set it up right!
What happens if u go barely over the vat threshold by accident and don’t want the hassle of registering for vat ? Do you still have to register for the year?
![Felix "Unfair" | [Stray Kids : SKZ-PLAYER]](http://i.ytimg.com/vi/Oswujxm2Ag0/mqdefault.jpg)
Are you a business owner and want to do your own VAT returns? Check out how Botfiler can help you here: botfiler.com
ohh Lord, I didn't realise I could claim back VAT on my business expenses even tho I do not meet the VAT threshold. Thanks for the info, I will register for VAT straight away. Thannks a million.
Glad we could help
Brilliant! All my college studies does not compare what you have done in a mater of minutes, many thanks
Very Informative! Took the fear out of VAT! Thanks so much
thanks Eric!
Huge gratitude for this video. You're a star.
Wow absolutely brilliant video. Don't know if I was noticing this correctly but the voice sync seemed a bit off but that has nothing to do with the qualilty explaining that you gave. Thanks a million.
glad we could help Donal!
Tanx a-mill. You made this super easy and saved me some stress.
Glad we could help John. Best of luck with your business.
Thanks Mark. Would be nice to have video for VAT registration process.
in the making! will keep you posted. You need to get a ROS account for your business first (for company or yourself as a sole trader)
@@TheAccountingChannel Understood, will do. Thank you Mark.
Great video, really cleared things up for me a first time business owner
This channel is a gem. Thank you!
thanks Ben!
Thankyou! Thankyou very much for boosting my job search.
This is very useful video. Thank you for doing this.
thanks for your comment Simona, I'm glad you found it helpful!
Thank you for the excellent video! What does the Revenue do with the intra EU trade detail?
excellent explanation. really helpful.thank you so much
thanks Leandro!
What about a video for filling out a VAT RTD>?
Hi Greg - please see our latest video on VAT RTD here: ruclips.net/video/X0jv4RfP79M/видео.html
Can you please make a video for reverse charge VAT
Hi Mark, Can you please shed some lights on RTD(Return of trading details)
Process, Requirement and what form we have to fill? I will much appreciate all your help!
Thank you
Hi Ashfaq - please see our latest video on VAT RTD here: ruclips.net/video/X0jv4RfP79M/видео.html
Thank you so so much for massive favour, you are a life saviour Mark
Thank you
Can you please make a video about the things you didn’t do as you mentioned in the end of the video. Such as selling to a customer in the EU ?
Hi Taha - thanks for your question. The long answer is, it depends:
- selling goods to a company with EU VAT number = no VAT charge
- selling goods to consumer/person in EU = you usually need to register your business there and charge VAT at the rate applicable in that country
- selling services to a company with EU VAT number = no VAT charge (they will reverse charge and self-account for it themselves)
- selling services to consumer/person in EU = usually you would charge your customers VAT at the rate that applies in your home country
Of course with all things, there are some exceptions and each case must be looked at specifically.
Hope this helps!
Hi is it possible for you to show us how to do apply for VAT Registration on Revenue?
Great video. Glad I found your channel !
Thanks Adam!
You're a star! Thank you very much!
thanks Victor
Hi Mark. thank you for all the great videos. They are so helpful to me. Best of luck for the future.
thanks Amanda!
Thanks for this video !
thanks Leonardo!
Hi Mark, by any chance would you guys be able to show how to do VIES and Instrat on a company basis?
thanks for the suggestion Edwina, we'll see what we can do and get a video done!
Thank you Mark, you are a gentleman 🙌
Thanks very much, this is great knowledge to have 👍
Glad you found it useful Alex!
What a fantastic video!! Thank you so much for that clear explanation and information. It has been most helpful 👌👌
thanks Debbie, glad you enjoyed it!
Hi Mark,
Thank you for you videos, it really helps , are you able to make an quick video about Postponed accounting for VAT section ? and what does it mean?
thank you for your time and all help
Under "Postponed Accounting" businesses that import from the UK (excl. NI) can declare and reclaim the VAT amount on the same return rather than paying VAT at the port and claiming it in the VAT return.
E.g. If I buy goods from the USA or UK, VAT is levied at the point of entry (the port) and I have to pay it immediately. I can claim it back in my next VAT return but I'm out of pocket until then which presents me with a cashflow problem.
Under postponed accounting, I can tell them not to levy VAT at the port but instead account for it in my VAT return using the reverse charge basis instead.
@@TheAccountingChannel Thanks,
Hello, great videos and really informative. If I registered for VAT at the start of October, when is my first VAT Return due?
assuming the registration was accepted and the start date was registered as early October for bi-monthly returns, your next VAT return is due to be filed by 19 November (or 23 November if filing on ROS.ie)
Hi! Thank you for the video. I’m wondering… can you claim vat back on things if you register after the expense was made? For example I’m currently not VAT registered but I am going to purchase a new laptop for my business needs, to claim the vat back do I need to register prior to purchasing the laptop? Finally, in order to get that VAT back, would I just go on the form that you’ve demonstrated and have that laptop as an expense and then it would say I’m owed x amount? Thank you again :)
Hi David, the rule of thumb here is that if the item to which the expense relates is used for a sale which is VATable then you can claim for the VAT back (e.g. I might purchase cotton, register for VAT and then sell t-shirts with VAT in price, I can claim the VAT on the cotton back). With the case of a laptop you may be able to claim a portion of VAT back over its useful life.
Great video! Is it the buyer who self accounts for VAT on a reverse charge basis?
Advisory fee or consultants fee obtained outside of Ireland regarding Financial services .. exempt or reverse charge applicable
Thanks so much, your video was so easy to follow!
Glad it was helpful G N!
Super video.. Great content, strate to the point.
cheers Conor!
Hi Mark, very good video. Thanks million! However about if I’m buying a service outside Europe. Should I pay VAT anyway?
How about taxi drivers? Will I get vat back if I import car for using as a taxi in ireland ?
Hi Mark, If the Irish company sells online on a VAT margin scheme second hand goods, what about the VAT paid in term of shipping labels and selling commission at 20% to Backmarket which is based in France, Where do I put such VAT while filling VAT3 return?
Thank you for that informative video...One question...how do I deal with funds received from a principal contractor ( construction sector ) where vat has been accounted for by the principal contractor . Are you aware of this accounting practice that exists since 2008...Many thanks..
Hi Martin, thanks for your comment - unfortunately I'm not very familiar with RCT, apologies!
Can you claim VAT back on imports from outside EU?
In Ireland, you can only claim VAT from Revenue if that VAT was paid to Revenue. Outside the EU, you may need to register for VAT in the country you imported from to reclaim VAT, but it is quite complex.
Great video thanks. I'm trying to set up ROS online and am having an issue with the first step. the error is "Either the tax type you have entered is not valid for this registration number or you have entered the registration number incorrectly" my PPS is correct so I think its the tax type, my previous tax type was PAYE- IND but there is no option for this in the drop down, only option is PAYE-EMP which is incorrect and most probably why I'm getting the error. Any advise offered is very much appreciated. Thanks.
Hi Francis, are you setting up ROS for Income Tax purposes? If so, you need to select the 'Income Tax' option (FYI - PAYE-IND is for employee payroll taxes and PAY-EMP is for employer payroll taxes)
@@TheAccountingChannel Thank you for replying, the issue is that PAYE-IND is not in the drop down, it is not an option I can choose. Thanks
@@MegaFraner Hi Francis, if you are an employee (i.e. you are not self employed / don't own your own business) you don't register on ros.ie - instead you need to register on www.ros.ie/myaccount-web/ - this is the portal for employees. Hope that helps!
Hi there. Thank you very much for this great tutorial. In "E2" field total goods from other eu countries means goods purchase for resale + goods purchase for business purposes such as envelopes using for packaging stuff to customers or just goods for resale? Thanks in advance.
hi Sordan, yes E2 is completed for any goods imported from another EU country
@@TheAccountingChannel Thank you very much for your kind answer. I have one more question if you dont mind. For example, I buy 1000 euro goods for resale from German sole trader who is not VAT registered. Do I need to put this 1000 euro to E2 field?
@@sordan64 no as they are not VAT registered
Thank you for the video!
I have one question, we are a startup company we are still not registered for VAT.
We are looking to buy some goods from another EU country, they are selling the goods with a VAT and they can sell without VAT if we have VAT number as a company.
In this situation do we need to pay VAT in both countries?
Hi Valon, thanks for your query. At present, because your business is not VAT registered, you are being treated as a "consumer", meaning the EU supplier must apply the VAT rate that applies in Ireland to you.
If you register for VAT, you are then a "business" customer, and under EU VAT rules, the reverse-charge mechanism ("self-accounting") applies, which means the VAT rate charged is 0%. You don't need to register for VAT in their country, only record the transaction for VAT purposes in Ireland
@@TheAccountingChannel On this point, if your business is not VAT register, I understand you don't charge VAT in your home country to the consumer, but if you export to another EU country, will the shipping carrier try to charge the consumer VAT or not? seeing as you can't do it in their basket due to not being VAT registered.
@@Ben-mx1ip good question and unfortunately it depends on the country's tax authority you are exporting too.
Can I ask a question? If I have bought a product from another eu country and have already paid the vat in that country, how can I claim back that vat?
Hi Keith, can you give more detail on this please? Was it good/service, are you registered for VAT in Ireland, was it inside or outside EU etc
Mark, I am still confused. I understand why you didnt charge the germany company any VAT in the vat 3 example, but the italian company you bought from, they didnt write any vat value on their invoice, but you self account for it, but why don't you actually have to pay any vat on that purchase from italy, because we made it neutral by adding it as a vat sale and a vat expense, I understand this is self accounting , but the end result is nobody pays any vat for this italian company's widgets . am I right?
that's correct John!
@@TheAccountingChannel Thanks Mark, thats very helpful, the last Question is , if I get a Bill for a service in the EU from a private person, and they are not vat registered, do I have to account for Vat still on vat 3 return in Ireland, even though the private consumer is not vat registered in their EU home country?
@@fitz5000xx hi John - in this case they are VAT exempt (rather than 0% rated) so you would NOT need to self-account or reverse charge the transaction.
@@TheAccountingChannel Thats great , thanks, my final scenario is, if a private citizen from Outside the EU , say in the USA or Australia, designs a web app for my company, and they charge me 2000 Euros for example, and they are not vat registered in their home country, am I liable for any reverse vat in this case to the state here in Ireland? any info appreciated. best regards. john
@@fitz5000xx very hard to say really as VAT is only in the EU (other jurisdictions outside EU have their own Sales Tax regimes). I would reverse charge it just to be safe.
really helpful thanks.
glad we could help!
Thank you for the video! I have a question: if VAT returns of the past havent been submitted, can they just be submitted "now for then" for all missing periods? thank you very much!
hi Leonardo, technically no, you would need to submit a return for each period where you are registered for VAT. There is a self-correction rule though that states: "For bi-monthly/quarterly/half-yearly remitters of VAT, if the net underpayment of VAT for the period being corrected is less than €6,000, the amount of the tax can be included as an adjustment on the VAT return to be submitted for the bi-monthly/quarterly/half-yearly period immediately following that in which the error was made." See more info here (page 105): revenue.ie/en/self-assessment-and-self-employment/documents/code-of-practice-revenue-audit.pdf
Very informative video Mark,would like to know how would you pay if you sell through dropshipping or Amazon FBA,how does the VAT apply and if you sell in the US or outside EU?
assuming you are an Irish based business, you would not need to charge VAT on goods being sold outside the EU (including USA)
@@TheAccountingChannel Is this the same for services or just goods? With regards to an Irish based sole trader selling services to businesses in the US?
If you sell ZERO goods in Ireland or to Irish customers but are a sole trader (resident in Ireland) selling goods through Amazon USA to USA customers only (goods bought in China shipped directly to USA) does this mean 0 is the ‘qualifying’ income for VAT threshold purposes correct? VAT registration is important for me to prevent vat charges on services provided by a USA business (amazon). Is vat registration possible? would appreciate a steer on both questions
Thank you for the info!
What about reverse charge for outside EU?
Hi Sean, there is no such thing as reverse charge outside EU - this only applies when selling to VAT registered companies in other EU jurisdictions. However, you do need to "self-account" for purchases both from the EU and outside EU on your VAT return.
Hi great informative video for a newbie.. As an artist do I have to charge vat on the products I sell, ie I create a drawing and transfer it to a metal shape. I then sell the finished medallion to a customer.
Hi Silver Sheriff - we have a few clients who are artists. Revenue's advice regarding VAT and works of art is as follows:
WORKS OF ART ( Works of art )
Rate
Reduced rate: 13.5%
Remarks
Schedule 5 Works of art are liable at the Reduced rate at importation & in circumstances of Section 48(1). However, where sold under the margin scheme or special auction scheme, such works are liable at the Standard rate on the margin. Other circumstances rate varies.
Value-Added Tax Consolidation Act 2010 (VATCA 2010) Ref
Section: 46(1)(c) Schedule: 3 Paragraph: 23
Thank you so much for this vid!!!!
You are so welcome!
Hi, just a quick question, does a partnership fill out the vat 3 as well? We did not start trading yet, but we have a few expenses on the equipment, which is quite a bit of vat. We also know that we will have to charge 23% after registration for every good sold. But is this tax reclaimable if we make below 35k?
hi GLZ, so all businesses (sole traders, partnerships, companies) have to register, charge, report (VAT3) and remit VAT if they breach the VAT registration thresholds. A business can voluntarily register for VAT before meeting these thresholds. Once registered for VAT, you can reclaim VAT on purchases that are used to make VATable sales.
@@TheAccountingChannel thank you for the fast reply, I have booked a short meeting with you over online for this Monday (Elynx Clothing). I am looking forward to this. Once again thank you for your great information and knowledge!
@@greenlightzone no problem GLZ. For consultation service specifically relating to your business we ask people to purchase this from us here: firstaccounts.ie/product/advice-sessions/ - otherwise if you would like a quote for accounting service, that is a free 15 minute conversation which can be booked here: firstaccounts.ie/arrange-discovery-call/
Very helpful! Just a question, if you volunteer to be registered for VAT even though your turnover for the 12month period is below the threshold of 75k. Are you obliged to charge VAT on the sells of goods? or can you decide not to charge as long as you don't claim back the VAT paid on the purchase of those goods. I wonder if the charge of VAT becomes mandatory just because you are now registered for it.
Many thanks!
Hi Douglas, thanks for your question. Once you register for VAT (either voluntarily or mandatory), you must charge it on all invoices and remit this VAT to Revenue.
Wow. That's amazing. Thank you.
Glad you liked it!
Thanks Mark for a very informative video. I have a question. If I'm selling products from a Shopify store and I don't actually physically ever handle these products, do I have to pay any additional tax from the sale of the product? So lets say I sell something for €30 and I pay my supplier €15. Do I have to pay any tax from that €30 I take from the sale? Thanks so much.
Hi Path - we cannot provide an definitive answer on this unfortunately as it depends on a lot of factors e.g. where the good is coming from, where it is going to, where your business is located, if being sold to a business or consumer etc.
How about the UK? After BREXIT 😬😬
there are loads of RUclipsrs producing UK VAT related content, best to seek those out (they would be more familiar with the UK tax laws). We do plan on creating videos on UK VAT from an Irish business perspective though in the near future! :)
@@TheAccountingChannel Yes... I am asking as an Irish business. I hope these calculations do not refer to the UK at all... I simply buy a product in the UK without VAT and I am not at any stage obliged to "self-assess" for my VAT. I do take into accounts only net value... True or false? Tnx
Question one how do you register for it, Its like looking for a needle in a haystack
firstaccounts.ie/how-do-i-get-a-vat-number-in-ireland/
Hi. Thanks alot for your video. I wanted to ask, do you hire trainees???
Hi Anushri, unfortunately not, we aren't a training firm but thanks for your interest!
Thanks for this video, super helpful! If I wanted to be a sole trader in Ireland on the side and don't expect to meet the 37K threshold to register for VAT is there anything else that needs to be done to start trading other than register for income tax?
Can I just issue invoices to Irish and EU customers without listing a VAT number? Would that mean without VAT there is no reporting every two months but just annual personal income tax on what was earned?
hi Peter, great question - yes you are correct, if you stay within the threshold all you would need to do is file an income tax return each year.
@@TheAccountingChannel that is great, thanks for confirming!
There's some confusion that has come up if I were to invoice for my services with an EU business outside of Ireland. What I'm hearing is they're looking for a VAT number to be listed on the invoice.
If you're not registered for VAT do you need to mention any tax reference number or other information on the invoice for them to process it correctly in their accounting?
Hi, Mark I’m in the process of setting up a driving school and I am not employing anyone else, do I charge VAT to my customers
hi Darren, if your sales over the last 12 months are more than €37,500 you should register for VAT and charge VAT to your customers.
Please book a meeting with me if you'd like help with this: meetings.hubspot.com/mark896
Thank you for your video! In Ireland when quoting prices of services, is it normal to include VAT in the negotiations or is VAT assumed and expected as an extra on the invoice?
VAT would be included in the quote! It's safe to assume that should be included anywhere in europe
Hi Diogo, in B2B (business to business) transactions it is normal to quote "ex-VAT" or without VAT, as VAT can be recovered by a business, it is essentially not considered a cost. Just be sure to say "€xxx plus VAT".
However, if you are selling to consumers, you should quote a price which includes VAT (as it is a cost they cannot recover).
May I ask you a question please. As a small sole trader that's not vat registered as I am just starting out. Will i have to pay VAT to my suppliers in the UK? - or the other way around is the UK wholesaler obligated to charge me VAT. Thanks
If you are not registered for VAT you are treated like a consumer. Pre-Brexit this would mean that you would have been charged VAT (and have to pay it) for goods/services purchased from the UK, however post-Brexit they will not charge you VAT, and you are supposed to self-account for this (for service) and for goods most likely you will get a VAT bill from Revenue at the point of entry in Ireland.
@@TheAccountingChannel thank you so much. I really appreciate you answering that question.
@@debbiefenton100 most welcome!
I have question,,,,,as small sole trade ,,,, can I ofert the services ,to hospital ,pub, houses , and big company like sub contracts,,,and charge it ,,,?
@@kcomfortsystemshvac7060 hi sorry I don't fully understand your question?
Hi Mark, One more question , how to declare VAT for sales to EU countrie B2C customer ? Normaly as in IE ? thanks
Or is it MOSS?
this really depends and you will need expert advice. It is distance selling and there are different thresholds depending on the country. It's too complex to go into here unfortunately.
@@TheAccountingChannel of course, i am talking about small orders like max. 5 monthly . Thanks
@@mariorainy If you sell goods and send them to consumers in another EU country, you usually need to register your business there and charge VAT at the rate applicable in that country - unless the total value of your sales to that country within the respective tax year falls below the limit set by the country. Here are the threshold values for each country: ec.europa.eu/taxation_customs/sites/taxation/files/resources/documents/taxation/vat/traders/vat_community/vat_in_ec_annexi.pdf
@@TheAccountingChannel Yep absolutelly, I am aware of this table, what if total sales are less then in the table?
Or what if you buy and sell With UK companies ?
Hi Taha, thanks for your comment. At the moment, the situation with Brexit makes accounting for VAT quite difficult. It is something I'm currently researching (as all accounting firms are!) and I am going to make a video about it soon.
At the moment it appears the status quo remains (as if it is still in the EU) - this will likely change in the future though.
Are you used for File return free utility or, You use softwere
hi there - we just use ROS.ie
HI Mark, thanks for a great video. I have a question in relation to the vat threshold for a partnership business. My husband and I run a photography business in Ireland and we would like to know if the threshold is €37.500 or if that doubles since we are married and have a partnership company. We are currently registered for VAT but our. turnover has since taken a hit due to COVID-19. so we are thinking of unregistering. Thanks a mil.
Hi Jessica - the thresholds are per business (I'm assuming yours are both under the same tax registration number), so your threshold is €37,500. If you both had totally separate sole trades, you would each have the €37,500 threshold. You cannot deregister unless the total turnover over the last 12 months is less than €37,500. Important to note that VAT on claimed expenses can be clawed back also.
I have just started selling online and I buy products from China and sell in diff eu countries do I need to register for VAT as my sales are let's say 20k annual ?
thanks
What is VAT on restaurant products? On Google it says that food VAT in Ireland is 9% is that true for restaurants?
Different types of food have different VAT rates. Presently the VAT rate for restaurants is 9% (during pandemic) but normally it is 13.5%. www.revenue.ie/en/vat/vat-rates/search-vat-rates/R/restaurants-food-and-drink-for-human-consumption-.aspx
@@TheAccountingChannel thank you a lot 🙏
@@simeduvancic9879 most welcome!
Hi Mark,
Thank you for a very helpful video. I am setting up a small business. I buy vintage clothing from within the EU for retail sale here. I wondering what are my VAT options. I know that I can wait for the threshold before registering for VAT. My EU suppliers are asking for my VAT number. I am a little confused. Any steer in this would be appreciated.
Hi Kammkmca, it's normal that they are asking for a VAT number because then they do not have an administrative task of registering for VAT in Ireland themselves (assuming they breach the distance sales threshold for Ireland). This would be a big pain for them - conversely if you are VAT registered they only need to charge 0% reverse charge. It might be easier for you to just register for VAT, however, this will increase your sales price and you will have the added burden of accounting and reporting VAT.
@@TheAccountingChannel Hi Mark , Thank you for your most helpful and prompt response. I am just starting off and I have not registered for VAT as I have not reached the threshold until E35,000 (online/distance retail sales). I have purchased vintage clothing goods from an EU member state supplier and have paid VAT to the supplier on the purchase. Having received the supplies from my EU supplier am I liable to pay VAT again to Irish revenue at the standard rate (23%). (If so, this would seem that I would be paying VAT twice on the same products)
@@kaamkmca Hi kaamkmca - the threshold for VAT registration for goods is €75,000 (if your business is based in Ireland) - the €35,000 threshold is for businesses based outside Ireland. You can register for VAT voluntarily before hitting the €75k threshold. If your supplier charges VAT on goods, it is probable that you won't pay VAT on it again.
@@TheAccountingChannel Hi Mark, Thank you once again. What you say makes common sense to me. I find it difficult to comprehend the language sometimes on the Revenue website. It is new to me. I have watched all your videos and I have learned hugely from them. I look forward to your next videos. Thanks once again!
@@kaamkmca thanks for the compliment! More videos coming soon :)
Hi again, quick question here, I see how you managed the expenses done outside Ireland (in Europe) where you have to put the 23% here in Ireland. Now, what about if my expenses come from China, should I do the same?
Hi again Stefano, sorry for late response! So if you buy goods for business use from a supplier based outside the EU, your business would pay VAT at the point of import. If you buy services for business purposes from a supplier based outside the EU, you should usually pay VAT at the applicable rate (probably 23%) as if you had supplied the service yourself (using the reverse charge procedure).
So in essence you "pretend" that the supplier charged you VAT. You can usually deduct this amount later on when you make your VAT declaration.
@@TheAccountingChannel Brilliant, I have it clear now, thanks and God bless you!
How would an IT contractor based in Ireland supplying services to a US company, who's not in Ireland handle VAT? Do they register for VAT?
The IT contractor in Ireland doesn't charge VAT to the US company. You need to register for VAT once you breach the €37,500 threshold in any 12 month period.
@@TheAccountingChannel once I registered, how should I notify Revenue that I am charging 0 VAT. I presume it's through VAT returns is it? Or I would need to give them some additional documents?
@@AJ_real if you are only selling to the US company, you would not need to report the 0% VAT charged for those sales.
You don't report sales of services to parties outside the EU in the VAT3 return
If we buy product from china and sell in USA (products will not touch the Irish land) but revenue come to Irish ltd, do we still have to pay VAT or not?
This would not be subject to Irish VAT
@@TheAccountingChannel Using this as an example, if you are a non-resident and revenue comes to Ireland and is wired out (but with no employees or local vendors etc), will you still maintain the 12.5% tax rate ? If not, how to maintain that? Do you offer strategies as part of your consultancy?
@@pamelaj.s.2522 presuming you have a limited company incorporated in Ireland and that you are its only director, the company could technically be tax-resident in the country where you live (depending on the Double Taxation Agreement Ireland has with the country you reside in). In short, this would mean that the company is not tax resident in Ireland and cannot avail of the 12.5% rate, and would need to abide by local corporate tax laws.
As you can imagine it is extremely complex, and you would need a specialist tax consultant to help you structure it properly (not us I'm afraid!)
Hello sir...nice work... Actually I am from India and planning a start up in Ireland...Is there is any way you can provide some assistance??
hi sourav, we can help with any accounting, bookkeeping or tax related aspects of your new business only. Typically these services cost around €250/month (ex VAT). You can arrange a Discovery Call with us here to get a suitable quote: firstaccounts.ie/arrange-discovery-call/
Hi Mark, does your business offer any form of training? I'm new to Irish VAT and I'm clueless. I've just been dropped in at the deep end with my new company and I don't want to get it wrong.
certainly we do - best would be to contact us here: for a quote: www.firstaccounts.ie/discoverycall/
Thank you for that info! I have a question about selling digital products from Ireland. I have done a little research but I'm still not getting my head around it! 🤯 Do I have to charge VAT on digital products even if I'm not even near the threshold? I have read about the €10,000 threshold but I'm so confused by it all! Etsy collect VAT on digital product sales even though im not VAT registered. I have read all their information on this already. I have also downloaded revenues documents on the one stop shop but nothing has clicked! Sorry for the longness and thank you in advance 🙂😁
What happens if your suppliers are based in China and VAT?
assuming you are a a business in Ireland and buying goods (not services) from China, the goods will be charged VAT at the point of import.
Great video. I'd love to have a chat, I'm a RUclips growth specialist. Would love to see if I can help you in exchange for some simple questions about VAT for RUclipsrs. I'm making a decent amount through adsense and trying to make sure I set it up right!
Sure thing Paddy, can you email us at info@firstaccounts.ie ?
@@TheAccountingChannel done.
Tax collection for the. Gov
Good video with very bad sound quality
Really great video, thank you so much
Glad you liked it megasonic!
What happens if u go barely over the vat threshold by accident and don’t want the hassle of registering for vat ? Do you still have to register for the year?