Should I charge VAT on my publishing service?

bearaman

I'm getting a publishing service off the ground and want to understand if I should charge VAT on my service. There's no formal registration of the service yet but do I have to register as a sole trader? Does it matter if my clients are based in EU or elsewhere?

Thanks,

J.

PCX

There are turnover thresholds at which you are obliged to register for VAT. Generally if you think the business will have a turnover of €75k pa if suppling goods or €37.5k for services then you need to register and charge VAT.

It can get more complicated when you are buying/selling abroad. You may have to do a reverse charge on VAT or register for VAT in another jurisdiction which you will probably want professional advice on at least initially.

An advantage to registering for VAT is you can claim back most of the VAT you pay out on inputs to the business like supplies, machinery, advertising etc. So it can save you money and if your primary customers are businesses they will not mind the fact you are charging VAT as they will be able to claim any VAT they pay to you back as well.

What are the VAT thresholds?

https://www.revenue.ie/en/vat/vat-registration/who-should-register-for-vat/vat-thresholds.aspx

This page explains the VAT registration thresholds when you are obliged to register for VAT.

The rates you need to charge are different depending on what you are actually publishing. you can get more detail in the link below

https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/goods-printed-matter.pdf

You may want to think about whether it is better to set up as a limited company instead of sole trader as well.

I know when you are setting up a business you want to keep the costs down as much as possible but it really is money well spent if you go to an accountant/tax advisor now to get a bit of advice on the best way to set yourself up as it could save you a lot of hassle/money in the end.

bearaman

Thanks for the helpful advice PCX. I don't image my total revenue will be above 1000 Euros this year so from that point of view, I'm OK not to register. However, I take your point about doing it so I can avoid VAT on purchased business products and services. Might do that.