The Ireland VAT Calculator helps you quickly determine the VAT amount on a purchase or service. You can calculate VAT by adding it to a net amount or removing it from a total amount.
Ireland VAT Calculator
Calculate Value Added Tax (VAT) for Irish transactions
Standard Rate
Reduced Rate
Second Reduced
Zero Rate
Total Amount
VAT Amount
Net Amount
VAT Rate
Removing VAT: Net = Amount ÷ (1 + VAT Rate)
The Ireland VAT Calculator helps you quickly determine the VAT amount on a purchase or service. You can calculate VAT by adding it to a net amount or removing it from a total amount.
When adding VAT:
- VAT Amount = Net Amount × VAT Rate
- Total Amount = Net Amount + VAT Amount
When removing VAT:
- Net Amount = Total Amount ÷ (1 + VAT Rate)
- VAT Amount = Total Amount – Net Amount
In Ireland, there are multiple VAT rates depending on the type of goods or services: standard (23%), reduced (13.5%), second reduced (9%), and zero (0%).
Adding Standard VAT Example
Let’s say you want to calculate VAT on a €100 product with the standard VAT rate of 23%:
Net Amount = €100
VAT Rate = 23% or 0.23
Calculate the VAT amount:
VAT Amount = €100 × 0.23 = €23
Calculate the total amount:
Total Amount = €100 + €23 = €123
Adding Reduced VAT Example
Now, let’s calculate VAT on a €100 electricity bill with the reduced VAT rate of 13.5%:
Net Amount = €100
VAT Rate = 13.5% or 0.135
Calculate the VAT amount:
VAT Amount = €100 × 0.135 = €13.50
Calculate the total amount:
Total Amount = €100 + €13.50 = €113.50
Removing VAT Example
Let’s say you have a total amount of €123 and want to calculate the net amount and VAT:
Total Amount = €123
VAT Rate = 23% or 0.23
Calculate the net amount:
Net Amount = €123 ÷ (1 + 0.23) = €123 ÷ 1.23 = €100
Calculate the VAT amount:
VAT Amount = €123 – €100 = €23
Irish VAT System
Ireland has a Value Added Tax (VAT) system with different rates depending on the type of goods or services:
- Standard Rate (23%): Applies to most goods and services, including electronics, clothing, alcohol, and most professional services.
- Reduced Rate (13.5%): Applies to certain goods and services such as fuel, electricity, building services, and professional cleaning services.
- Second Reduced Rate (9%): Applies to specific items like newspapers, hotel accommodation, and certain tourist services.
- Zero Rate (0%): Applies to essential items like food, children’s clothing, books, oral medicine, and exports.
- Exempt: Some services are exempt from VAT, such as financial services, educational services, and medical care.
VAT Rates by Category
Standard Rate
Reduced Rate
Second Reduced
Zero Rate
VAT Registration in Ireland
In Ireland, VAT is administered by the Revenue Commissioners. Businesses must register for VAT if their annual turnover exceeds or is likely to exceed €37,500 for supplies of goods, or €37,500 for supplies of services.
Once registered, businesses must:
- Charge VAT on taxable supplies at the appropriate rate
- Submit VAT returns, usually every two months
- Keep proper records of all transactions for at least 6 years
- Issue tax invoices for supplies
- Remit any VAT collected to the Revenue Commissioners
Businesses can choose different filing frequencies (bi-monthly, quarterly, or annual) based on their annual liability.
VAT Compliance and Penalties
VAT compliance is essential for businesses in Ireland. The Revenue Commissioners impose penalties for various non-compliance issues:
- Late Registration: Penalty based on the amount of VAT that should have been collected
- Late Filing: Interest of 0.0219% per day on late payments
- Shortfall Penalty: Ranges from 3% to 100% depending on the severity of the shortfall
- Incorrect Returns: Penalties for careless or deliberate errors in VAT returns
Businesses can reduce penalties by voluntary disclosure of errors before the Revenue Commissioners detect them. It’s important to maintain accurate records and seek professional advice when needed.
Understanding Irish VAT
What is VAT?
Value Added Tax (VAT) is a consumption tax levied on the value added to goods and services at each stage of production or distribution. It was introduced in Ireland in 1972 to replace wholesale tax. VAT is administered by the Revenue Commissioners and is an indirect tax, meaning it is collected by businesses on behalf of the government.
VAT History in Ireland
Ireland introduced VAT in 1972 at a single rate of 16.37%. Over the years, the system has evolved to include multiple rates. The standard rate has fluctuated, reaching 21% for many years before increasing to 23% in 2012 as part of budgetary measures. The reduced and second reduced rates have been introduced and adjusted over time to support specific sectors and economic activities.
VAT Rates
Ireland has a multi-rate VAT system with four main rates: standard (23%), reduced (13.5%), second reduced (9%), and zero (0%). Each rate applies to specific categories of goods and services. The standard rate applies to most goods and services. The reduced rates apply to specific items like fuel, electricity, and tourism-related services. The zero rate applies to essential items like food and children’s clothing.
Tax Invoices
Registered businesses must issue tax invoices for their supplies. A valid tax invoice must include: the words “Tax Invoice”, seller’s name and address, VAT registration number, customer’s name and address, issue date, invoice number, description of goods/services, quantity, price per unit, total amount, VAT rate, and VAT amount. Invoices must be issued within 15 days of the supply.
VAT Returns
Registered businesses must file VAT returns with the Revenue Commissioners. The filing frequency depends on the business’s annual liability: bi-monthly (liability over €3,000), quarterly (€501 to €3,000), or annual (€500 or less). VAT returns can be filed online through the Revenue Online Service (ROS). Businesses must calculate the difference between VAT collected on sales and VAT paid on purchases.
VAT Schemes
Ireland offers several VAT schemes to simplify compliance for smaller businesses. The Cash Receipts Basis allows businesses to account for VAT when payment is received rather than when invoices are issued. The Flat Rate Scheme for farmers allows farmers to charge a flat rate of 5.4% on their supplies without accounting for VAT on purchases. There are also special schemes for second-hand goods, tour operators, and travel agents.
Irish VAT Information for Businesses
VAT Registration Process
Businesses can register for VAT online through the Revenue Online Service (ROS), by completing a TR1 form, or by contacting their local Revenue office. Required information includes business details, type of business, expected turnover, and banking information. Once registered, businesses receive a VAT registration number and must start charging VAT on taxable supplies from the effective date of registration.
VAT Accounting
Proper VAT accounting is essential for compliance. Businesses must maintain accurate records of all sales and purchases, tax invoices issued and received, and any adjustments or corrections. Most businesses use accounting software to track VAT transactions and generate reports. Records must be kept for at least 6 years and be available for Revenue inspection upon request.
International VAT
Special VAT rules apply to international transactions. Goods exported from Ireland are zero-rated, while imports are subject to VAT. For intra-community supplies within the EU, businesses need a valid VAT identification number and must apply the reverse charge mechanism. Services to customers outside the EU may also be zero-rated if certain criteria are met. Ireland follows the EU VAT directives for cross-border transactions.
Input Tax Credits
Businesses can claim input tax credits for the VAT paid on their business purchases. This includes goods, services, and some capital items used in making taxable supplies. There are restrictions on claiming input tax for certain expenses, such as entertainment expenses, passenger vehicles, and goods used for both business and personal use. Input tax must be claimed within 4 years of the end of the accounting period.
VAT Audits
The Revenue Commissioners conduct VAT audits to ensure compliance. These may be triggered by risk assessment, random selection, or specific concerns. During an audit, the Revenue will examine records, invoices, and financial statements. Businesses should prepare by maintaining accurate records, reconciling VAT accounts regularly, and addressing any discrepancies promptly.
VAT Planning
Effective VAT planning can help businesses minimize their tax burden legally. This includes proper timing of purchases and sales, understanding zero-rating opportunities, structuring transactions efficiently, and taking advantage of available reliefs and exemptions. Businesses should also consider the cash flow implications of VAT and plan accordingly. Professional advice is recommended for complex VAT situations and international transactions.