VAT - the Republic of Ireland and Northern Ireland

As at 1 January 2015 the standard rate of VAT in the Republic of Ireland is 23%, but reduced rates of 13.5%, 9%, 5% or 4.8% may apply to some supplies. The reduced rate of 13.5% is for certain goods and services, including:

  • building work
  • veterinary services
  • works of art
  • electricity, solid fuels, heating oil, and gas for heating
  • repair services
  • child car seats
  • non-oral contraceptive products

A second reduced rate of 9% was introduced for certain goods and services mainly related to tourism such as the following:

  • restaurant and catering services
  • hotel and holiday accommodation
  • admissions to cinemas, theatres, certain musical performances, museums and art gallery exhibitions
  • fairgrounds or amusement park services
  • the use of sporting facilities
  • hairdressing services
  • printed matter such as brochures, maps, programs, leaflets, catalogues and newspapers.
  • admissions to open farms and built and natural heritage facilities

A reduced rate of 4.8% also applies to the following supplies:

  • livestock
  • greyhounds

Exporting goods to the Republic of Ireland

A VAT-registered Northern Ireland business does not need to charge VAT on goods it is sending to the Republic of Ireland, provided it keeps documentary proof of export It must also obtain the Irish customer’s VAT registration number and show it on the invoice (including the IE prefix).

Even where VAT is not being charged, the net value of the sale must still be reported on the UK VAT return. It should also be included on the EC Sales List, and the Intrastat return if the business is required to make one.

The Northern Ireland business is able to reclaim any UK VAT on the goods which it is exporting, subject to the normal rules about reclaiming input VAT.

If the Irish customer is not registered for VAT, and the Northern Ireland business is not registered for Irish VAT, then UK VAT must be charged. No VAT is chargeable on goods which would normally be zero-rated or exempt when supplied in the UK ( for example, books, children’s clothing and some food items ).

Any compulsory extra charges for freight, shipping, postage or delivery should be charged at the same rate of VAT as the rest of the items in that shipment, being either 0% if all the conditions are met, or the usual UK rate applicable to those items if not.

Importing Goods from the Republic of Ireland

A VAT-registered Northern Ireland business importing goods from Ireland should give the Irirsh supplier its UK VAT registration number (including the GB prefix) so that Irish VAT is not charged.

When a UK VAT-registered business imports goods from Ireland from an Irish VAT-registered business, the UK business should pay UK VAT on the import by including VAT in its regular UK VAT return, at the appropriate UK VAT rate.

VAT on services provided in or to Ireland

UK VAT may need to be charged on services performed in Ireland or to clients based in Ireland, depending on the type of service supplied. This is a complex area, and there are specific rules for the following services:

  • services relating to land or property
  • services of short-term hire of means of transport
  • services involving physical performance and events. For example artistic, cultural, education and training, sporting, entertainment services, exhibitions, conferences, meetings
  • supplies of admission to artistic, cultural, education and training, sporting, entertainment events, exhibitions, conferences and meetings and services related to admissions
  • ancillary transport, valuation of / work on goods
  • restaurant and catering services
  • passenger transport
  • freight transport
  • intermediary services (generally agencies or brokers working for a commission)
  • training services supplied to overseas governments

Under the general rule, if the service is being supplied to a consumer ( rather than a business ) in Ireland, it will be subject to UK VAT. This means that UK VAT must be charged at the ususal UK rate, either standard rate, reduced rate, zero-rated or exempt. The UK business will account for VAT in the usual way.

If the service under the general rule is being supplied to a business customer in Ireland, it will be within the scope of Irish VAT ( UK VAT is not charged ). The customer does not need to be registered for VAT for the service to qualify as being for business purposes, but some evidence of the business purpose should be obtained.

Reclaiming Irish VAT

A VAT-registered Northern Irish business which buys goods ( which are not for export ) or services in Ireland may be able to reclaim any Irish input VAT paid, by using a special refund scheme. This is available to a Northern Ireland business which is not registered in Ireland for VAT and does not make any supplies there. The claim is made using the specific form, and sent to the appropriate tax office in Ireland together with original supporting invoices and a UK VAT66 certificate.