VAT on Purchases from other EU countries.

Randyleprechaun

Hi,

Can someone explain simply how to treat the VAT on purchases which are goods for re-sale as part of my business. Business is electrical natured.

Basically, if I buy €100(with zero VAT, as I'm VAT registered) worth of stuff from a supplier in N.Ireland, how should I be handling this in my VAT return.

I've looked on revenue site but not 100% sure.

I'm seeing things like account for the VAT in box T1 and then in box T2 which would negate it.

Also seeing stuff about "deductible persons"....what exactly is this.

Looking for the definitive answer,

Thanks in advance

Alan Shore

Intra EU Acquisitions are zero rated for VAT between registered persons.

The way you account for VAT is that you charge Irish VAT on the value of the supply, as you are registered for VAT you can take an input credit for the same amount. So essentially you add the VAT to sales and purchases.

Randyleprechaun

Thanks,

So, mostly I'll be charging 13.5% VAT on the stuff as I'm installing aswell.

So just for arguments sake, say in one VAt period I buy €100 worth of stuff from N. Ireland, I'll be charging €13.5 VAT to my customer on that. what values should I be entering in boxes T1 and T2.....lets just say there were no other transactions that month.

Thanks again

Alan Shore

So you buy €100 of product from the UK. It is VATable at 23%. You include €23 in sales and €23 in purchases and then Another €13.50 in sales for your sale. So you owe €13.50.

Randyleprechaun

Thanks Alan,

Sounds pretty straight forward now!!!!!

You're 100% sure on that???

Alan Shore

100%

add the 23% on products that attract 23% if bought in the ROI to sales and purchase VAT and then put the value in the EU products products box on the form.

marek1

selling service with 13.5Vat what is for example installation of goods is more attractive to customer then selling goods @23% Vat.
For example if I am wind turbine dealer and installer I can install wind turbine (purchased from spain 0%VAT) adding 13.5% vat to it but sell with 23%VAT is that correct ?

updated
found on revenue website:
13. Services taxable at the rate of goods (the two-thirds rule)

Where the VAT-exclusive cost of goods to a supplier exceeds two-thirds of the VAT-exclusive price charged to a customer the supply is taxable as a supply of goods. Where the VAT-exclusive cost of goods to a supplier does not exceed two-thirds of the VAT-exclusive price charged to a customer the supply is taxable as a supply of services. This is known as ‘the two-thirds rule’