Suppose you have a net price of 1,000 euro and want to add VAT at the 23% standard rate. The VAT is 23% of 1,000, which is 230 euro, so the gross price a customer pays is 1,230 euro. To work backwards from a gross price, you divide rather than multiply: a 1,230 euro gross figure divided by 1.23 returns the 1,000 euro net amount, and the difference of 230 euro is the VAT. The same method works at the 13.5% reduced rate and the 9% second reduced rate, simply by changing the multiplier. Getting the direction right matters, because 23% of the net is not the same as 23% of the gross.
Item
Amount (EUR)
Net price (ex-VAT)
1,000.00
VAT at 23%
230.00
Gross price (inc-VAT)
1,230.00
How it is calculated
VAT is a percentage added to the net, or ex-VAT, price of goods and services. To add VAT you multiply the net amount by one plus the rate, so 23% standard rate means multiplying by 1.23. To remove VAT from a gross, or inc-VAT, price you divide by that same factor, which recovers the net price and the VAT element. Ireland uses a 23% standard rate, a 13.5% reduced rate for items such as construction and many services, and a 9% second reduced rate for newspapers and some tourism. A 0% rate also applies to most food, children clothing, and oral medicines. Choose the rate that matches the goods or service, since applying the wrong band changes both the VAT and the price the customer sees.
Frequently asked questions
What are the Irish VAT rates?
The standard VAT rate is 23%. A 13.5% reduced rate applies to many services including construction and fuel, and a 9% second reduced rate applies to newspapers, some tourism, and gas and electricity. There is also a 0% rate for most food, children clothing, and oral medicines. Choose the rate that applies to your goods or service.
Who must register for VAT in Ireland?
Under Revenue rules, a business supplying taxable goods in Ireland must register for VAT once turnover exceeds 85,000 euro in any 12-month period. For services the threshold is 42,500 euro. Businesses below those thresholds can register voluntarily to reclaim VAT on their purchases. Registration is done through Revenue Online Service (ROS).
Can a VAT-registered business reclaim input VAT?
Yes. A VAT-registered trader can offset VAT paid on business purchases (input tax) against VAT collected on sales (output tax). If input tax exceeds output tax in a period, Revenue will issue a repayment. You must hold valid VAT invoices to support any input tax claim, and the purchases must relate to taxable business activity.
How often do Irish businesses file VAT returns?
Most businesses file bi-monthly VAT returns, covering two-month periods, with payment due within 23 days of the period end when filing electronically via ROS. Revenue may assign monthly, quarterly, or annual filing periods depending on your turnover and payment history. Late filing attracts interest at 0.0219% per day on any outstanding VAT.