FILING VAT RETURNS Understanding how and when to file a VAT Return

Last updated: May 13, 2024

After your company completes Incorporation and Tax Registration, including VAT, it's essential to file VAT Returns bi-monthly. The VAT3 Return records the Value-Added Tax (VAT) payable, or reclaimable, by you in your taxable period. You should register the company for its own ROS Certificate once Tax Registration is completed. Timely and accurate filing of VAT Returns is of utmost importance to ensure your company adheres to its tax obligations. Maintaining proper Bookkeeping records will be an important basis for filing correct VAT Returns.

Letter tiles spelling 'VAT' and 'TAX' on a marble table, indicating our comprehensive guidance on VAT Returns in Ireland.
Irish VAT Return Filing

What is VAT?

Value-Added Tax (VAT) is a levy imposed on the sale of goods or services within the territory of the Member States of the EU. The tax, in all cases, is ultimately payable by the final consumer of the good or service and each party in the chain of supply (manufacturer, wholesaler and retailer) acts as a VAT collector.

These parties collect VAT from their customers and report this collected amount in their VAT returns to the Revenue. During this process, they are also entitled to reclaim any VAT they have paid to their suppliers, as appropriate.

Furthermore, it is also important to distinguish between two types of VAT. Revenue introduced two-tier VAT Registration, separating lower risk registrations (domestic only) from higher risk ones (Intra-EU). Companies applying for a VAT registration to the Revenue Commissioners must specify which tier they wish to apply for.

If you Register Your Company with Incorpro, you can choose to register for domestic only or Intra-EU VAT in our simple Online Form. More detail regarding the two types of VAT can be found in our Irish VAT and Intra-EU VAT Registration Guidance article.

VAT Return Obligations

Do I have to file a VAT Return?

In Ireland, anyone involved in the supply of goods and services who is registered for VAT, or is obliged to register, must accurately account for VAT. It is mandatory for VAT-registered companies in Ireland to file VAT Returns each period.

Incorpro can apply for your VAT Registration for a competitive price, and can do so for free if you decide to Register Your Company through us. More details regarding Tax Registration can be found on our Tax and VAT Registration Service page.

How often do I have to file a VAT Return?

VAT Returns have a taxable two-month (bi-monthly) period commencing on the first day of January, March, May, July, September, and November. Companies with an annual VAT liability under €14,400, having filed VAT returns for at least one year, may be eligible to file less frequently and apply for it with Revenue.

Incorpro offers the Accounting and Bookkeeping service starting from only €99 + VAT, which can assist you in managing these VAT Returns obligations efficiently. For those that already have the Ongoing Accounting Package with Incorpro, we will take care of the VAT Return filing for you.

What is the VAT Return Filing Deadline?

The deadline for filing and paying Value-Added Tax (VAT) is the 19th day of the month following the end of each taxable period, whereas ROS filers have an extended deadline until the 23rd day of the month (VAT returns must be filed via ROS). Late or non-filing and payment of VAT could result in penalties and interest charges.

Do I need to file a VAT Return if I haven't started trading?

An entity that is registered for VAT must file a VAT Return on time regardless of whether or not it was trading in the period. VAT inputs can be claimed on activities prior to carrying on a trade, so the entity may be entitled to a refund even if it has yet to make sales.

Ensuring that all supporting documents for VAT Returns are properly maintained is essential. Incorpro offers low cost Accounting and Bookkeeping services, which can assist you in managing these VAT Returns obligations efficiently.

How do I file my VAT return?

Filing VAT Returns is a streamlined process conducted online through your ROS (Revenue Online Service) account. If you haven't set up your ROS account yet, you should Register for ROS as soon as possible as it takes about one week to complete. Remember, separate ROS Certificates are necessary for individual and company logins, which means personal ROS accounts cannot be used for filing company Tax Returns.

As outlined by the Revenue Commissioners, the VAT Return should be completed as follows:

T1 – VAT on sales

This figure is the total VAT due on your:

  • Supplies of goods and services.
  • Intra-Community Acquisitions of goods. This refers to the acquisition of moveable goods by a business in one Member State from a business in another Member State of the EU. In these transactions it is the purchaser that is required to self account for the VAT as if he or she had made the supply themselves.
  • Import of goods, where you have applied VAT Postponed Accounting. Postponed Accounting arrangements enable an accountable person to account for VAT on imports on their VAT3 Return so that import VAT may, subject to the usual rules on deductibility, be reclaimed at the same time as it is declared on a VAT3 Return.
  • Services received from abroad. You are regarded as the supplier of services received from abroad (EU and non-EU) for VAT purposes.

T2 – VAT on purchases

This figure is the total VAT which you are entitled to reclaim in respect of costs incurred by you on:

  • Goods and services, insofar as they relate to your taxable supplies and qualifying activities.
  • Intra-Community Acquisitions of goods.
  • Import of goods where you have applied VAT Postponed Accounting.
  • Services received from abroad.
  • Flat-rate addition (for farmers).

Where you issue, or receive, a credit note, you may adjust the T1 and T2 figures.

T3 – VAT payable

VAT is payable to Revenue where the T1 figure is greater than the T2 figure. The amount payable is the difference between the two figures.

T4 – VAT repayable

VAT is repayable to you where the T2 figure is greater than the T1 figure. The amount repayable is the difference between the two figures.

E1 – Intra-EU supplies of goods

E2 – Intra-EU acquisitions of goods

ES1 – Intra-EU supply of service

ES2 – Intra-EU acquisition of services

PA1 – Postponed Accounting

This is the total of the Customs value of goods imported under Postponed Accounting, as per Customs Declarations plus Customs Duty.

Additional Considerations regarding VAT Returns

How do I pay the VAT liability?

Payment of any VAT liability can be instructed when filing the VAT Return. In order for Revenue to withdraw the funds directly from the company's Bank Account, a ROS Debit Instruction should be created in advance with payment instructed upon the filing of the return.

How does Revenue pay a VAT Refund?

VAT Refunds are processed directly to a designated Financial Institution account. You should notify Revenue of the account details via ROS. The Collector-General may withhold your repayments if you have outstanding Tax Returns or may offset the repayment against outstanding tax liabilities.

What is the Return of Trading Details (RTD)?

You must complete a Return of Trading Details (RTD) Form annually. The RTD form details the total purchases and sales for the year, broken down by the VAT rate. You must submit your complete RTD Form at the end of the year and are prompted to do so on ROS when filing your final year-end VAT Return.

The RTD Form will be displayed in your ROS inbox. You should ensure that the tax settings in your Bookkeeping system are set up with the RTD in mind so that it can be easily completed at the year end.

Maintaining adequate books and records from the company's Date of Incorporation is important. Our state-of-the-art Accounting and Bookkeeping service efficiently manages all these aspects, ensuring your business stays compliant and organised.

Further Guidance and Assistance

Should you have any queries or require assistance with your Accounting and Tax needs, our dedicated team at Incorpro is here to help. Connect with us by calling 01-4429409, or visit our Contact Page for more ways to get in touch. Stay updated and engaged by following our Social Media Pages on Twitter, Facebook, LinkedIn and Instagram.

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