If you are planning to start a company in Ireland, it is mandatory to apply for VAT registration number for certain thresholds before kick-starting your business. The same applies to residents of other countries that want to deliver products to the country. Non-registration or applying for registration with the Irish tax authority late may earn you some financial penalties.
This guide will take you through everything you need to know to file VAT returns in Ireland.
How to submit a VAT return to the tax authorities in Ireland?
Irish VAT returns are done electronically. You can either start and complete the process online or offline before uploading it to the tax authority’s website.
Below are the steps to guide you through completing your tax return in Ireland in no time.
● The first step is to visit the Revenue Online System (ROS) website and complete your registration.
● To complete your VAT returns in Ireland, your business must first become a ROS customer and get ROS access credentials. For you to access the ROS, follow the 3 steps outlined below
● First, apply for ROS Access Number (RAN),
● Request for your Digital certificate
● Download and save the Digital certification on your computer
● Optionally, your business must have a business tax agent linked to your VAT account on the tax authority’s website.
● Select the VAT Return option, input your VAT return figures and submit.
Alternatively, you can choose the option of offline application (ROS Offline), complete the VAT and upload it to the ROS website.
Do you need a fiscal representative?
Non-European residents that want to register their businesses in Ireland may need the services of a fiscal representative. This local VAT representative stands for you at the local VAT authorities and performs all Irish VAT obligations on your behalf. With this in mind, you may need to make some financial obligations to the agent for proper representation.
Irish prospective business owners that reside permanently in Europe do not need such assistance. They may, however, require the services of an agent to handle tax formalities on their behalf. Unlike in the case of non-European residents, issuing a bank guarantee is not needed. All financial obligations and VAT debts are in the company name and can be handled without help from a third party.
Using the Irish VAT OSS Return for Business not based in Ireland
If you operate a business not based on the continent but sell to customers across EU countries, you need to charge VAT. Consequently, any VAT charged on European sales must be returned to European tax bodies. Different European countries have different tax rates, which can result in complexity.
You don’t need to worry. The EU has a scheme that handles the VAT returns of businesses that sell to customers in different European countries. With a centralized system known as One Stop Shop or simply VAT OSS, you can fill your VAT return on all sales made across Europe at once.
Listed below is the step-by-step guide that walks you through the process.
● Register at the Irish Revenue Online Sevice VAT OSS site under the Non-Union scheme. A digital certificate is then issued to you.
● You may skip registering for VAT OSS if you sell to other European businesses with a valid VAT number. The reverse charge mechanism is better applied here. The B2B tax manoeuvre allows the shift of the responsibility of collecting VAT to the buyers, who later pass the money to tax authorities.
● Businesses under this system must fill the VAT return quarterly and no later than 20 days after the end of every quarter.
● To submit your Return using the certificate issued, Head over to ROS My service. Complete the form and then File Return.
● Information that will be requested is your VAT OSS registration number and details of the EU sales.
● Based on the information, a preview is then generated for you to review.
● Next is for you to select the VAT you charged across every EU state you delivered to.
● Also, input the number of taxable sales in each country along with the correct VAT rate.
● Once you have provided all the sales information, the OSS calculates the VAT amount due for the quarter in focus.
How to make your Irish VAT Return payment?
After knowing the amount you owe in VAT Return, the next logical step is to make payment. You are presented with different payment options available for non-EU located businesses after submitting the Irish OSS VAT;
● Credit and debit cards
● Single Debit Instructions (SDI)
● ROS Debit Instruction (RDI)
● Direct Debit Instruction (DDI)
It doesn’t matter the currency you made sales with; all payments on One Stop Shop VAT Return should be in Euro.
How does VAT work in Ireland?
VAT is added to the price of almost every product or service purchased in Ireland. That includes all goods purchased online and delivered to Ireland. Also, products ordered online from a vendor in another EU country may also attract a VAT charge that applies in Ireland if the vendor has not exceeded the Distance Sales Threshold. Note that the standard tax rate in Ireland is 23%, while the intermediate rate is 13.5%. The two reduced rates are 9% and 5%.
How do I calculate my VAT return?
To calculate your VAT returns for your business, you must file the amount your customers paid VAT tax (output tax) and the amount you pay in VAT to your manufacturer or supplier (input tax). Subtract the input VAT paid by you from the output VAT paid by your customers. Mostly, your Returns are computed automatically using the information provided.
How and when must VAT Returns be submitted?
To report its VAT position, a company must fill out periodic VAT returns twice every month, which is the standard tax period. The option of a monthly reporting period is available on request for companies in the permanent payment solution. There is the possibility of other tax periods if the conditions are met. VAT returns are expected to be filled not later than the 23rd day after the end of the tax period.
When it comes to tax complaince, ignorance is never an excuse. Every misdemeanor, from not registering for Irish VAT, poor book keeping to late filing of returns, incur a standard penalty of €4,000. Therefore, ensure to research the Irish VAT legislation thoroughly before starting the process. Filing VAT Returns may be tricky at first. If seek. seek professional help or advice from an accountant or qualified tax adviser.