VAT thresholds - who decides what is goods or service

Aoife.sere · 14-03-2022 07:37PM #1

I am in the process of opening a small cafe, in trying to figure out if i must register for vat at this stage, I cannot find clear information as to how a decision is made if a product is sold as a goods or service.

As a small business starting out it would be ideal if the 75K threshold applied

my understanding is that things like sale of coffee is considered goods, but hot food a service.

what if offering a mix of both? Who makes the decision on this? is there someone in the department who I can contact to get an answer or should I just hope that what my accountant applies is right? there seems to be very little information officially available from Revenue.

Thankyou

relax carry on · 14-03-2022 08:23PM

This is why you have accountants.

https://www.revenue.ie/en/vat/vat-rates/search-vat-rates/vat-rates-database.aspx

https://www.revenue.ie/en/vat/vat-on-goods/food-drinks-and-supplements/food-and-drink.aspx

https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Goods/vat-on-food-and-drink-supplied-by-wholesalers-and-retailers.pdf

14-03-2022 08:34PM

She's only asking a question. Maybe follow your own username and relax.

Aoife, restaurant/cafe is a service.

Restaurant services are liable to VAT at the second reduced rate (9%). However, supplies of alcohol, bottled waters, soft drinks, sports drinks and vegetable juices (excluding fruit juices) are liable to VAT at the standard rate even when provided as part of a restaurant service (23%).

There is some good information available in this manual that you should have a read of and discuss your queries with your accountant.

https://www.revenue.ie/en/tax-professionals/tdm/value-added-tax/part03-taxable-transactions-goods-ica-services/Services/services-vat-treatment-of-restaurant-and-catering-services.pdf

Aoife.sere · 22-03-2022 09:59AM

thankyou, I was aware of those rates and did consult an accountant.

They also had said that due to the mix nature of the place (there is also a shop and other activities) it was a bit difficult to give an immediate answer and in the end it would be based on what percentage of the turnover comes from actual restaurant activity (service of hot food) vs take away and shop sales etc.

I spoke to someone in revenue and went trough the different activities and they are satisfied that as only a small percentage comes from food service mI can apply the goods threshold at this time.

thanks for your replies anyway

VAT thresholds - who decides what is goods or service

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