If you run an Irish business, VAT is one of those things you can't afford to get wrong. Revenue takes a dim view of late returns and incorrect rates. Here's everything you need to know for 2026.
The Four VAT Rates
Ireland operates a four-rate VAT system:
| Rate | Percentage | Applies to | |------|-----------|------------| | Standard | 23% | Most goods and services | | Reduced | 13.5% | Construction, housing, fuel, cleaning, hairdressing | | Second reduced | 9% | Newspapers, sporting facilities, tourist accommodation | | Zero | 0% | Most food, children's clothing, oral medicines, books |
Most service businesses charge 23%. If you're unsure which rate applies to your services, Revenue's VAT rates database is the definitive source.
VAT Registration Thresholds
You must register for VAT if your turnover exceeds:
- €80,000 for goods (selling physical products)
- €40,000 for services
These thresholds are based on turnover in any continuous 12-month period — not the calendar year. If you're approaching the threshold, register proactively. Revenue prefers early registration over late discovery.
Filing VAT Returns
Most Irish businesses file bi-monthly VAT returns (every two months). The return covers:
- T1: VAT on sales at 23%
- T2: VAT on sales at 13.5% and 9%
- T3: VAT on purchases (input VAT you can reclaim)
- T4: VAT on imports from EU and non-EU countries
Returns are filed through Revenue's ROS (Revenue Online Service) and are due by the 19th of the month following the end of the return period.
Common Mistakes
Applying the wrong rate. A restaurant charging 23% on dine-in food when 13.5% applies. A consultant charging 13.5% when their services are standard-rated at 23%. Get it right from the start.
Missing input VAT claims. You can reclaim VAT on legitimate business expenses — software subscriptions, office supplies, professional services. Keep your receipts and claim everything you're entitled to.
Late filing. Even if you owe nothing, you must file on time. Late filing triggers penalties and interest charges. Set a calendar reminder for the 15th of every odd month.
How Knyt Handles VAT
Knyt Accounts has Irish VAT built in from the ground up:
- All four rates are preconfigured — no manual setup - Invoices automatically calculate VAT based on the line item rate - T1–T4 return data is generated automatically from your transactions - Returns are formatted for direct submission through ROS
You don't need to understand the mechanics of VAT return calculations. Knyt handles it. You just review the numbers and submit.