Check whether Irish VAT registration is required and estimate VAT owed.
VAT registration status
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Applicable threshold
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VAT owed if registered
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Turnover ex-VAT (if registered)
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Cash accounting eligible
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Your breakdown
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Why the threshold is different for goods and services
Ireland maintains two VAT registration thresholds: 80,000 euro per year for businesses that primarily supply goods, and 40,000 euro for businesses that primarily supply services. The lower services threshold reflects the view that service businesses have lower input costs and therefore less need to reclaim input VAT, making early registration less distortive. A business that supplies both goods and services is caught by a proportional test: if either threshold is exceeded on its own business type, or if the combined turnover crosses either threshold in proportion, registration is required.
The distinction matters for freelancers and consultants in particular. A web designer, accountant, or consultant charging services-only revenue must register at 40,000 euro, roughly half the threshold that applies to a hardware reseller. Many small service businesses are surprised that their modest annual income is enough to trigger VAT registration. Once registered, they must charge VAT on invoices, file returns every two months, and remit the net VAT to Revenue.
What VAT registration actually costs you
If your clients are businesses registered for VAT themselves, adding VAT to your invoices costs you nothing commercially, because they claim it back. The administrative burden is the real cost: maintaining VAT records, filing returns every two months, and the possibility of a VAT audit. If your clients are consumers or exempt businesses who cannot reclaim VAT, registration effectively makes you 23% more expensive unless you absorb the VAT by cutting your prices. That competitive pressure is why many consumer-facing businesses deliberately stay below the threshold if turnover allows it.
The cash accounting advantage
Businesses with turnover below 2 million euro can use the cash receipts basis. Instead of accounting for VAT when an invoice is issued, you account for it when the customer pays. For businesses with 30, 60, or 90 day payment terms this is a significant working capital benefit. You never have to remit VAT to Revenue before you have received it from the customer. Most small and medium Irish businesses are eligible for cash accounting and should consider it when registering, as it reduces the risk of a cash flow squeeze when a large client pays late.