Ireland’s value-added tax (VAT) system sits at the center of how businesses price, sell, and stay compliant in the Irish market. In 2024, Ireland’s VAT revenue was nearly €22 billion. The multiple rates, along with specific rules for registration, filing, refunds, and cross-border trade, can have an important impact on cash flow and compliance.

Below, we’ll explain which Ireland VAT rates apply to different goods and services, when businesses should register, and how ongoing VAT compliance is handled in Ireland.

What’s in this article?

• What is the Ireland VAT rate?
  
• What are the reduced VAT rates in Ireland?
  
• What is an Irish VAT number, and when is it used?
  
• How does VAT work in Ireland?
  
• Who needs to register for VAT in Ireland?
  
• What are the VAT filing and compliance requirements in Ireland?
  
• How do VAT refunds work in Ireland?
  
• How Stripe Tax can help
  

What is the Ireland VAT rate?

Ireland’s standard VAT rate is 23%. That rate applies to many goods and services sold in Ireland, such as electronics, adult clothing, alcohol, professional services, digital services, and business-to-consumer (B2C) software. Ireland also applies reduced, special, and zero VAT rates for certain goods and services. If there’s no specific rule saying a lower rate applies, 23% is the default.

What are the reduced VAT rates in Ireland?

The VAT rate you charge depends on what you’re selling. While 23% is standard, lower rates are reserved for essential items, specific industries, and certain policy-driven exceptions in Ireland.

Reduced rate: 13.5%

This rate applies to a defined set of services and goods, such as hotels and short-term accommodation, cinema and amusement park entrance fees, building services, and certain fuels and utilities. Restaurant and catering services, and hairdressing are currently in this category, but their VAT rates will drop to 9% in July 2026.

Second reduced rate: 9%

This applies more narrowly to items and services such as certain sporting facilities and gym memberships, and domestic electricity and gas used for heating, which is reduced on a temporary basis through 2030.

Livestock rate: 4.8%

The livestock rate is a special rate that applies to the sale of live animals (excluding chickens) such as cattle, sheep, pigs, and certain horses.

Zero-rated: 0%

Essential goods and specific transactions are zero-rated, including many basic food items, children’s clothing and footwear, books and ebooks, newspapers, oral medicines, certain types of medical equipment, exports, intra-EU supplies to VAT-registered businesses, and the installation of solar panels on private homes.

VAT-exempt goods and services

Some services are exempt from VAT in Ireland. When a good or service is exempt, VAT isn’t charged, and the business that supplies it can’t reclaim VAT on it. In Ireland, medical, financial, and educational services are VAT-exempt. Live theater and musical performances are also typically exempt, as long as food or drinks are not served during the performance.

What is an Irish VAT number, and when is it used?

An Irish VAT number identifies businesses within the VAT system and signals that they’re registered to charge and reclaim VAT. Once your business’s application is approved, the Irish tax authorities assign a VAT number that uniquely identifies your business for VAT purposes in Ireland. Irish VAT numbers begin with “IE” followed by a combination of numbers and letters, with variations depending on business type and registration date.

VAT-registered businesses are required to include their VAT number on invoices issued to customers, particularly in business-to-business (B2B) transactions. Your business customers use your VAT number as part of the process of reclaiming VAT where permitted, which makes accurate invoicing imperative. When selling goods or services to VAT-registered businesses in other EU countries, the VAT number supports zero-rating and reverse-charge treatment. Irish VAT numbers can be checked through the EU’s VAT Information Exchange System (VIES) to confirm that a registration is valid.

How does VAT work in Ireland?

VAT-registered businesses add the correct VAT to the price of each taxable good and service they sell. Businesses usually also pay VAT on their own business expenses, such as equipment, software, and professional services. On each VAT return, businesses calculate the VAT they collected from customers (output VAT) and subtract the VAT they paid on costs (input VAT). If output VAT exceeds input VAT, the business pays the balance to the Office of the Revenue Commissioner, known as “Revenue.” If input VAT is higher than output VAT, the business can claim a refund.

Businesses can reclaim input VAT on business expenses related to the sale of all VAT-eligible goods and services, including zero-rated supplies. They can’t reclaim input VAT on business expenses related to VAT-exempt sales.

Who needs to register for VAT in Ireland?

Ireland sets VAT registration thresholds to limit compliance obligations for smaller businesses. These thresholds are based on turnover over any rolling 12-month period, not the calendar year.

They include:

• Goods threshold: Businesses established in Ireland that primarily sell taxable goods must register for VAT once their turnover exceeds €85,000.

• Services threshold: Businesses supplying taxable services must register once their turnover exceeds €42,500.

• Mixed supplies threshold: For businesses supplying both goods and services, the applicable threshold depends on which activity accounts for the majority of turnover.

• Intra-EU acquisition threshold: Irish businesses purchasing goods from other EU member states should register if the value of those acquisitions exceeds €41,000 in a 12-month period, even if sales remain below other thresholds.

• Distance selling and digital services threshold: Businesses selling goods or digital services to Irish customers from elsewhere in the EU need to account for Irish VAT once their total EU cross-border customer sales exceed €10,000. They can do this either through local VAT registration or via the EU’s One Stop Shop (OSS), an online VAT payment portal and management system.

• Non-EU foreign businesses threshold: Most non-EU businesses must register from their first taxable sale in Ireland, since there’s no turnover threshold. If goods are stored, fulfilled, or delivered from within Ireland, VAT registration is generally required from the first sale.

If it’s clear that your business’s turnover will cross the threshold in the near term, Ireland’s tax agency, Revenue, typically expects you to register in advance rather than waiting until after the limit is breached. Some businesses choose to register even if they’re under the threshold so they can reclaim VAT on costs or appear more established to customers.

Reverse charge rules

When non-Irish businesses sell certain services to Irish VAT-registered businesses, the reverse charge often applies, which shifts VAT reporting responsibility to the Irish customer and removes the need for local registration. Non-EU businesses are usually not required to appoint a fiscal representative when registering for Irish VAT, but appointing one can be helpful for ensuring the process is followed properly.

What are the VAT filing and compliance requirements in Ireland?

The standard VAT filing cycle in Ireland is bimonthly, and returns cover fixed periods such as January–February or March–April. Returns and payments are generally due by the 19th day of the following month, or by the 23rd when filed electronically. Businesses with low annual VAT liabilities can elect to file every four months or twice a year, which reduces administrative overhead. Regardless of filing frequency, all VAT-registered businesses must submit an annual Return of Trading Details that lists sales and purchases by VAT rate. VAT-compliant invoices and supporting documentation should be kept for at least six years in case of review by Revenue.

How do VAT refunds work in Ireland?

If the VAT you’ve paid on business expenses is higher than the VAT you’ve charged customers in a filing period, the difference becomes refundable. Businesses request refunds directly on their VAT return, rather than through a separate application. Once processed, refunds are typically paid electronically by the Irish tax authorities.

Refunds are usually issued promptly, but they can be delayed if prior returns, annual summaries, or other tax filings are outstanding. Businesses that regularly receive refunds, such as exporters or zero-rated suppliers, might be approved to file monthly to improve cash flow. Foreign businesses that aren’t registered but incur Irish VAT can often reclaim it through EU or non-EU refund schemes, subject to eligibility rules.

How Stripe Tax can help

Stripe Tax reduces the complexity of tax compliance so you can focus on growing your business. Stripe Tax helps you monitor your obligations and alerts you when you exceed a sales tax registration threshold based on your Stripe transactions. In addition, it automatically calculates and collects sales tax, VAT, and GST on both physical and digital goods and services—in all US states and in more than 100 countries.

Start collecting taxes globally by adding a single line of code to your existing integration, clicking a button in the Dashboard, or using our powerful API.

Stripe Tax can help you:

• Understand where to register and collect taxes: See where you need to collect taxes based on your Stripe transactions. After you register, switch on tax collection in a new state or country in seconds. You can start collecting taxes by adding one line of code to your existing Stripe integration or add tax collection with the click of a button in the Stripe Dashboard.

• Register to pay tax: Let Stripe manage your global tax registrations and benefit from a simplified process that prefills application details—saving you time and simplifying compliance with local regulations.

• Automatically collect tax: Stripe Tax calculates and collects the right amount of tax owed, no matter what or where you sell. It supports hundreds of products and services and is up-to-date on tax rules and rate changes.

• Simplify filing: Stripe Tax seamlessly integrates with filing partners, so your global filings are accurate and timely. Let our partners manage your filings so you can focus on growing your business.

Learn more about Stripe Tax, or get started today.