Falling below the VAT-registration threshold
A trader may be required register for VAT depending on what goods or services they supply and what their turnover is from the sale of goods or supply of services.
Certain trading activities are VAT exempt. Traders who engage in these activities are not entitled to register for VAT. These activities include insurance services, the services of a doctor, dentist or optician and educational services.
Traders who supply VAT-able goods or services are obliged to register for VAT if their supply of goods or services exceeds the following thresholds in a continuous 12 month period:
a) €37,500 for the supply of services
b) €75,000 for the supply of goods
Traders who acquire goods or services must register for VAT where:
- The acquisition of goods from other EU member states exceeds €41,000 in a continuous 12 month period. This threshold applies even if the trader is supplying VAT-exempt goods/ services.
- The trader acquires a ‘new means of transport’ from another EU member state. This applies to persons buying new cars from other EU member states. Persons in this category must register for VAT regardless of the cost of the vehicle or regardless of whether it is in the course of business or for private use.
- The trader receives certain ‘fourth schedule services’ for business purposes from the EU. Registration for VAT is required regardless of the sum paid for the services. Such services include banking, financial and insurance services and also the services of solicitors, consultants and accountants. Persons acquiring ‘fourth schedule services’ for private purposes are not required to register for VAT.
If a trader’s VAT liability for the year has fallen below thresholds outlined above, they may apply to Revenue to de-register for VAT.
If you require any advice on any of the points raised above, please contact our tax department
Karina Janeczek
Tel: 021 427 2900
Email: kjaneczek@crowleysdfk.ie
