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VAT Deregistration
by Kieran Kennelly

VAT Registration

As you are aware many businesses, whether carried on as a sole trader or a company, are obliged to register for VAT.  Common reasons a business is obliged to register for VAT include the following:


  • The business is a taxable person i.e. it engages in the supply within the State of taxable goods or services in the course or furtherance of a business.


  • The business makes intra Community acquisitions of goods.


  • The business receives fourth schedule services (for business purposes) from abroad.  Fourth schedule services include consultancy services provided by accountants, lawyers, consultants and engineers.  All persons, other than private individuals, who receive fourth schedule services from abroad (for business purposes), must self account for the Irish VAT and must therefore be registered for VAT regardless.


  • The business is involved in property transactions within the State and needs to register for VAT as a result of same.


While in principle, anyone that supplies goods or services within the State is a taxable person, the legislation provides that certain persons whose turnover does not exceed specified limits are not regarded as being taxable persons.  A business whose turnover, in any twelve month period, does not exceed or is not likely to exceed €37,500 (in the case of supply of services) or €75,000 (in the case of supply of goods) is not deemed a taxable person and therefore not obliged to register.

A business that does not, nor is likely to, exceed the relevant limit may still elect to register for VAT.  The trader will be obliged to charge and account for VAT on sales but will have the advantage of being able to claim for VAT inputs.


A trader who has elected to register for VAT may cancel his / her registration by arrangement with the relevant Revenue District.  It is a condition of such election that he / she pays to Revenue any excess of VAT refunded to him / her over the tax paid for the taxable periods during which the election had effect or 3 years prior to the date of application for cancellation whichever is lesser.  If a trader falls below the turnover threshold he / she may also deregister for VAT and a clawback will not occur if the deregistration was not on foot of an election to register.

It is important to note that a trader may fall below the turnover threshold yet still be obliged to be VAT registered e.g. the trader in question receives fourth schedule services.  It is also important to note that a deregistered trader must constantly analyse his / her turnover and monitor whether or not it is necessary to register for VAT again.  

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