Know how and when to file a VAT return Filing VAT Returns

Last updated: Nov 02, 2023

Once your company has been incorporated and subsequently registered for taxes, including VAT, then it must file VAT returns each bi-monthly period. 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. It is important that VAT returns are filed on time and correctly, so the company is compliant with its tax obligations. Maintaining proper bookkeeping records will be an important basis for filing correct VAT returns.

VAT Return Filing
VAT Return Filing

What is VAT?

Value-Added Tax (VAT) is a tax, which is payable on sales 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. Each party in the chain of supply (manufacturer, wholesaler and retailer) acts as a VAT collector.

They collect VAT from their customer and include that VAT in their VAT return to Revenue. When returning the VAT collected, they can reclaim as appropriate, VAT which has been charged to them by their suppliers.

Do I have to file a VAT return?

Any person who supplies goods and services within Ireland and is registered, or required to register, for VAT must account for VAT. If your company is registered for VAT in Ireland then it is required to file a VAT return each period. If your company has an Ongoing Accounting Package with Incorpro, then we will take care of the VAT return filing for you.

How often do I have to file a VAT return?

The taxable period is a two-month period (bi-monthly) commencing on the first day of January, March, May, July, September and November. If a company has filed at least one year of VAT returns and its annual VAT liability is less than €14,400, then they may apply to Revenue to file returns less frequently.

What is the VAT return filing deadline?

You must file and pay your Value-Added Tax (VAT) by the 19th day of the month following the end of each taxable period. For ROS filers, the time limit for filing a VAT return is extended to the 23rd day of the month (VAT returns must be filed via ROS). You may incur interest and penalties for late, or non-filing and payment, of your VAT.

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.

Supporting documents in relation to VAT returns should be kept, so maintaining adequate books and records from the company's date of incorporation is, therefore, highly recommended. We offer low cost bookkeeping services if you need help with this.

How do I file my VAT return?

VAT Returns can be filed online via your ROS account. If you have not already set up your ROS account, you should register for ROS as soon as possible as it takes about one week to complete. Separate ROS certificates are used for your personal and company logins. Hence, you can not file your company's tax returns from you personal ROS account.

According to the Revenue Commissioners, you should complete the return 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.

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 repayments are made directly to an account in a financial institution. 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 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.

Further Guidance and Assistance

If you would Incorpro's help with your VAT return filing or if you would like to speak to us about any of your accounting and tax needs, call us on 01-4429409 or contact us more contact information.

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