What is VAT in Ireland, and how does it work?

VAT tax in Ireland is the tax charged on most Irish goods and services. In Ireland, the VAT rate depends on the category that is assigned to specific products. Some goods are exempt from VAT while for others, you can reclaim the tax in your VAT return. On this page, we explain what VAT in Ireland is, which VAT percentages in Ireland apply, who must register for VAT, and how to claim a VAT refund.

The information provided here is for informational and educational purposes only and does not constitute tax advice. You should consult with a qualified tax professional or adviser regarding your individual tax situation. Tax laws and regulations are complex and subject to change, and the information provided may not be applicable to your specific circumstances. We are not liable for any tax decisions or actions you take based on this information.

VAT in Ireland is a type of consumption tax applied by the Irish government. As a member of the European Union, Value-Added Tax in Ireland and its legislation is based on EU directives. It is regulated by the Value-Added Tax (VAT) Act, which was introduced in 1972. The official Irish tax authority responsible for VAT tax in Ireland is the Office of the Revenue Commissioners. 

In Ireland, VAT is a tax charged on the sale of services and goods. It’s an indirect tax paid by customers and collected by Irish businesses. Usually, Value-Added Tax in Ireland is included in the price of goods and services. Customers will see both the total sales price and the VAT percentage in Ireland on their receipt. In Ireland, VAT is ultimately paid by the final consumer. If you order goods from outside the EU, you might have to pay VAT once the goods are imported.

Value-Added Tax is added at each stage of the production process. This means that VAT tax in Ireland is gathered by producers, manufacturers, wholesalers, and retailers on behalf of the Irish government. Businesses then have to report the tax to the government by including it in the VAT returns to Revenue. It is also possible for Irish businesses to reclaim Value-Added Tax. In Ireland, for example, you can claim refunds on any VAT paid for raw materials, other supplies, and additional business-related expenses.

The rate of VAT in Ireland is split into multiple segments. In Ireland, the standard VAT rate is 23%, but there are also several reduced VAT rates. These include:

• The reduced rate of 13.5%.
• The second reduced rate of 9%.
• The reduced rate for agricultural goods and services of 4.8%.
• The zero Value Added Tax rate for all exports and other products.

Which VAT percentage is applicable in Ireland depends on the types of services and goods that are sold. Additionally, you do not have to pay VAT tax in Ireland on products exempt from Value-Added Tax. This applies to educational, financial, and medical services as well as live musical and theatrical performances if no food or drink is served during the show.

The standard VAT percentage in Ireland is 23%. It is charged for all goods and services that are neither exempt from VAT nor subject to the reduced Irish VAT rates. The standard VAT rate in Ireland usually applies to:

• Tobacco
• Machinery
• Office equipment

*rates correct as at July 2025.

As you can see in this map, the standard rate of VAT in Ireland is rather high compared to many other countries in Europe. The standard VAT rates in countries like Germany or Spain are lower than in Ireland, while Value-Added Tax rates in Greece and Poland are comparable to the Irish VAT rate. Some European countries have an even higher VAT percentage than Ireland. These include Hungary and Croatia.

Apart from the standard VAT rate in Ireland, there are three reduced VAT tax rates.

The first reduced VAT rate in Ireland is 13.5%. In Ireland, this VAT percentage is applied to certain services and goods, such as heating oil and coal. This reduced tax rate is also charged on cleaning and maintenance services.

In the past, Ireland identified several products that are subject to a second reduced VAT rate. This rate of VAT in Ireland is typically set at 9%. Customers in Ireland must pay Value-Added Tax, for example, on the following goods and services:

• Electricity
• Hairdressing

In Ireland, a VAT percentage of 4.8% is commonly referred to as livestock rate, since it is a reduced tax rate for agricultural goods and services. This reduced VAT rate generally applies to livestock (excluding chickens). 4.8% VAT is also charged on greyhounds and the hire of horses.

In addition to the reduced VAT tax rates in Ireland, there are goods that are taxed with a VAT percentage of zero. A zero Value-Added Tax rating is generally applied to all Irish exports, foodstuffs such as vegetable seeds, fertilisers, and wheelchairs.

VAT in Ireland is also to be paid if goods are imported from another country. The general rule is that Value-Added Tax and customs duty are payable at the point of importation to Ireland. In Ireland, VAT tax on in-country and imported goods is mostly charged with the same VAT rate.

In Ireland, VAT tax is either charged by applying the standard VAT percentage or reduced rates. Irish businesses add the tax to their usual prices when selling services and goods to private customers in Ireland. The consumer pays the Value-Added Tax, and the business then reports and pays the VAT to Revenue.

Registration for Irish VAT tax is obligatory if your business turnover exceeds the applicable VAT thresholds or is likely to exceed them. If your turnover is below the threshold, you can still register for VAT tax in Ireland voluntarily. Registration is required not only for taxable individuals, but also for those who receive or supply taxable services from abroad. Generally, VAT thresholds depend on the business turnover in any continuous twelve-month period.

The thresholds for Value-Added Tax in Ireland vary depending on the type of product. Additionally, two major factors are the origin of the goods and services and the applicable VAT percentage for these acquisitions in Ireland:

There are two ways to calculate VAT tax in Ireland. One will give you the VAT rates that must be added to the goods and services. The other leads to the total price, including the Value-Added Tax in Ireland. Using this method, you can also calculate the price excluding VAT.

To solely calculate VAT as an Irish business, you divide the VAT rate by 100 and multiply it by the net price. If you apply the standard VAT rate in Ireland and a net price of 100 euros, your calculation looks like this:

1. 23 / 100 = 0.23

2. 0.23 x 100 = 23

The standard VAT to be paid on a product with a net price of 100 euros is 23 euros. Another formula lets you calculate the gross price, including Value-Added Tax. In this example, the net price of a service or good is 100 euros:

1. Standard VAT rate: 100 x 1.23 = 123

2. First reduced VAT rate: 100 x 1.135 = 113.50

3. Second reduced VAT rate: 100 x 1.09 = 109

4. Super reduced VAT rate: 100 x 1.048 = 104.80

Vice versa, someone who paid the gross price can calculate the net price of goods and services if they know which VAT rate is correct. Below, you can find a calculation where the above gross prices have been used:

1. Standard VAT rate: 123 / 1.23 = 100

2. First reduced VAT rate: 113.50 / 1.135 = 100

3. Second reduced VAT rate: 109 / 1.09 = 100

4. Super reduced VAT rate: 104.80 / 1.048 = 100

Some goods and services and Irish businesses are exempt from Value-Added Tax. In Ireland, VAT tax generally does not have to be paid by the following businesses, although there are exceptions where they have to register to account for VAT:

• Businesses that do not exceed the relevant turnover threshold.
• Hospitals, cinemas, and many more.

There is a wide range of goods and services that are exempt from Value-Added Tax in Ireland, including:

• Postal services
• Financial services
• Sporting facilities
• Funeral services

To reclaim VAT, you’d need to make a claim through a VAT 3 return. You can reclaim Value-Added Tax in Ireland if you have records to support these claims. Records could be a relevant customs receipt or a valid invoice for Value-Added Tax. 

In Ireland, VAT tax refunds can be claimed on goods and services that you have used for the purposes of taxable business supplies. You cannot reclaim VAT tax in Ireland for the following costs, even if you have completed a VAT registration:

• Most foodstuffs and other personal services
• Most accommodation

You can claim a VAT refund in Ireland if you are VAT-registered and engaged in qualifying activities or selling taxable services and goods. However, you cannot reclaim Irish Value-Added Tax for any activities not related to your business or on products used to manufacture exempt items. 

A refund of VAT can be claimed within a time limit of four years. Different requirements can apply to individuals who are not registered for Value-Added Tax in Ireland.

VAT tax in Ireland must be filed and paid by the 19th day of the month that follows the end of each period. The VAT return has to be correct and complete and submitted to the Collector-General. You can use the Revenue Online Service (ROS) for VAT returns.

The VAT 3 return records both the Value-Added Tax payable and the VAT that can be reclaimed during a certain period. If a business has outstanding tax returns, the Collector-General has the right to withhold VAT repayments. Refunds are paid directly into an account at an Irish financial institution.

Just as there are different types of Value-Added Tax in Ireland, Raisin Bank offers a variety of savings accounts. Understanding what VAT in Ireland is, and how VAT works in Ireland is complicated enough, so why not save time and money in other business areas? Simply register for a Raisin Account free of charge, choose and open an account, transfer your funds, and watch your savings grow!

*Rates correct as at July 2025. For the most up to date rates, visit https://www.revenue.ie/en/vat/vat-rates/search-vat-rates/current-vat-rates.aspx