Irish VAT Rates
Irish VAT rating structure are mainly based on 4(four) rates :-
The standard rate - The standard rate of VAT will be reduced to 21% from 21.5% with effect from 1 January 2010. The rate is applied to the net price of the goods which equates to 17.36% of the selling price. So one can avail a reduction of 17.36% on the displayed price of items in stores. This rate will be applicable to all goods and services that are not exempt or eligible zero or reduced rates. The goods and services that will come under this rate - supplies of motor vehicles, petrol, electrical supplies, furniture, carpets, adult footwear and clothing.
The reduced rate – The first reduced rate of VAT is 13.5%, which applies to hotel and holiday accommodation, restaurant services, certain fuels (fuel for heating and others), buildings and building services, sporting activities, certain newspapers etc., catering, new houses, construction services, and certain labor intensive services.
The second Reduced rate of VAT is 5.2%, which applies to livestock, live greyhounds and the hire of horses.
0(Zero) Rate – This rate is applicable to export, certain food and drink, books, oral medicines, certain medical aids, and children's clothing and footwear; basic foodstuffs etc.
There are also some exempted goods and services, which include financial, medical and educational activities.
VAT Rate in Northern Ireland
From 1st January 2010 the standard rate in Northern Ireland increased up to 17.5% from 15% for most goods and services.
The changes in VAT rates in Ireland will make some effects on invoices, credit notes, advance payments, contracts with fixed interval payments, existing contracts. The overall effects will be as follows:-
Vat registered customers
For the customers which are vat registered in Ireland, all VAT invoices issued B2B on or after 1st January 2010 should liable for VAT at 21% if not the invoice is issued before this date. The same will be applied to the goods or services that were supplied before the changeover date.
Not VAT registered customers
Goods or services which are really supplied to unregistered persons earlier to the date of a change in VAT rates are assessable at the operational rate as they are supplied, despite of the fact that they are invoiced on or after the changeover date.
Contracts with interval payments
If any invoice is issued after 1st January, 2010 with respect to a contract with fixed interval payment, VAT will be charged at 21% The date an invoice issues in respect of a contract with a fixed interval payment spanning 1 january 2010 will determine the VAT rate. If the invoice issues after 1st Jan 2010 21% VAT will be charged despite of the fact that payment was obtained as the higher rate was in place.
Payment in advance
Where payments (including deposits) are collected from VAT registered businesses before 1st jan 2010 regarding goods or services not supplied until on or after that date they are cause to undergo VAT at the effectual rate at the time the invoice is issued or should have been issued with respect to the payment (i.e. by 15th day of the month following the month in which the payment was made), whichever is the earlier. Amounts collected from unregistered person are eligible for VAT by reference to the existing rate at the time of payment and not the date of supply.
For all kinds of sales like budget account sales, credit sales, hire purchase sales and other credit sales, the VAT will be applied to the existing rate at the time of sales
Cash receipt basis
Non VAT registered customers
For the customers who are not registered with VAT and likely to undergo VAT on the cash receipts basis should be accountable for VAT at the rate in force at the time the goods or services are supplied and not at the rate related when payment is received.
Vat registered customers
For VAT registered customers who are likely to undergo VAT on cash receipts basis, the applicable VAT rate will be the rate in force on the date of the supply in spite of of when the invoice issues.