Registering for vat in Ireland for start up businesses-the essentials

Starting a business?

You may have to register for vat if you are an accountable person. An accountable person is a taxable person and includes sole traders, partnerships, and companies.

Obligation to register

You are only obliged to register for vat if your turnover exceeds certain thresholds which are as follows:

  • €37,500 for persons supplying services
  • €35,000 for persons making mail order or distance sales into the State
  • €41,000 for persons making acquisitions from other EU states
  • €75,000 for persons supplying goods
  • €75,000 for persons supplying goods and services where 90% or more of the turnover is from supplying goods.

This 90% figure does not include goods sold at the standard or reduced rates and are manufactured from 0% rated materials.

Note that your turnover figure can be reduced by the amount of vat paid on stock for re-sale.

A person who is not established in Ireland must  register and account for vat if he supplies taxable goods or services to taxable customers in Ireland. There is no turnover threshold in this situation.

Certain persons in Ireland must register by reason of their acquisition of goods or services from abroad. This includes exempt businesses and non vat registered businesses. 

These persons must register if their acquisitions from abroad exceed €41,000 in a 12 month period. They must also register if they receive taxable services from abroad.

Electing to register

You can choose to elect for VAT even if your turnover does not exceed the vat turnover threshold. Farmers and fishers may also elect to register

How to register for vat

You register for VAT on the ROS (Revenue’s online services) system but your business must be established in the State first. Individuals and sole traders complete form TR1; companies fill our TR2.

Your local tax district office will tell you when the VAT registration takes effect. Once you register you must submit tax returns and payments electronically.

Word of warning

If you are only starting off in business it is strongly recommended that you engage the services of an accountant to clarify exactly what you need to do to be tax compliant. It is easy to focus all your attention and energy on starting and growing your business and to forget about administration and taxes. 

These issues are vitally important and the money you may spend getting good, professional advice is money well spent and a good investment in your business.