The thresholds
Ireland runs two main VAT registration thresholds, and which one applies to you depends on what you sell. Revenue measures them over any continuous period of twelve months, not over your accounting year and not over the calendar year. That distinction catches people out more than any other rule in this area.
| What you supply | Threshold |
|---|---|
| Services only | €42,500 |
| Goods | €85,000 |
| Goods and services, where at least 90% of turnover is goods | €85,000 |
| Goods made from zero-rated materials, sold at the reduced or standard rate | €42,500 |
| Acquisitions of goods from other EU member states | €41,000 |
| Distance sales into the EU (the EU-wide threshold) | €10,000 |
The test is forward-looking as well as backward-looking. You must register when you pass the threshold, and also as soon as it becomes reasonable to expect that you will pass it in the next twelve months.
In practice that means a business that signs a single contract worth more than the threshold has an obligation on the day it signs, not on the day the money lands. If you wait for the bank balance to prove it, you are already late, and Revenue can assess VAT on sales you invoiced without it.
When you might register before you have to
Registration below the threshold is allowed, and for some businesses it is the right call. It is worth doing when your customers are themselves VAT-registered businesses, because they reclaim the VAT you charge and your price does not really rise for them — while you start reclaiming VAT on everything you buy.
It is usually the wrong call when you sell to consumers. Your prices effectively rise by the VAT rate overnight, or your margin absorbs it. A café or a hairdresser trading under the threshold is often better off staying there.
- Selling mostly to VAT-registered businesses — registering early usually costs you nothing and recovers input VAT.
- Heavy start-up spending on equipment, fit-out or professional fees — early registration can recover a meaningful sum.
- Selling mostly to consumers — registering early is a real price rise; wait for the threshold.
- Exporting or selling zero-rated goods — registration turns you into a repayment trader, and Revenue refunds you.
How to register
VAT registration is done electronically through Revenue Online Service. A limited company registers through ROS using its company details; a sole trader registers using their PPS number, and will normally need to be registered for income tax first.
- Register for ROS if you are not already — this requires a tax reference number and takes a few days because Revenue posts part of the process.
- Complete the eRegistration form for VAT, selecting the correct registration date. This date decides which sales fall inside the registration, so it matters.
- Choose your filing frequency. Most new registrations are put on bi-monthly VAT3 returns.
- Supply evidence of trading in Ireland. This is the step people are not expecting.
- Wait for the registration number to issue, then start charging VAT from the effective date.
Domestic-only versus intra-EU registration
The application asks whether you want a domestic-only registration or an intra-EU one. A domestic-only number lets you trade within Ireland. An intra-EU registration puts you on the VIES system so you can zero-rate supplies to VAT-registered customers in other member states and account for acquisitions from them.
Intra-EU registration is harder to obtain and Revenue applies more scrutiny to it. If you genuinely trade across borders, apply for it at the outset — upgrading later means going through the evidence process a second time.
What changes the day you are registered
Registration is not a piece of paper. It is an ongoing set of obligations that start immediately.
- You charge VAT on your sales at the correct rate from the effective date of registration.
- Your invoices must carry your VAT number, the rate applied, and the VAT amount, to qualify as valid VAT invoices for your customers.
- You file VAT3 returns, normally every two months, and pay by the 23rd of the month following the period end when filing through ROS.
- You file an annual Return of Trading Details, which reconciles the year and is a common source of Revenue queries when it does not agree with your VAT3s.
- You keep records capable of supporting every figure for six years.
- If you are registered for intra-EU trade, you file VIES statements, and Intrastat once you pass the volume thresholds.
The mistakes that cost money
Registering from the wrong date
Backdating a registration to recover input VAT on start-up costs also backdates your obligation to charge output VAT on everything you sold in that window. If you did not charge it, you still owe it. Pick the date deliberately.
Applying the wrong rate
Ireland has several VAT rates and the boundaries between them are not intuitive, particularly in food, construction and mixed supplies. Getting it wrong in your favour produces an assessment with interest; getting it wrong against yourself is money you simply hand over.
Reclaiming VAT you are not entitled to
VAT on petrol, on most passenger cars, and on entertainment is not recoverable. These appear on nearly every Revenue VAT audit because they are easy to spot in a purchases listing.
Filing nil returns while trading
A run of nil VAT3s from an active business is one of the clearest audit triggers there is. If a period genuinely had no activity, file it as nil and keep the explanation with your records.