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How to Handle VAT Returns

As the owner of a small start-up business, it can be almost impossible to see the need to hire the help of professionals for various activities.

After all, sales have only begun to occur in trickles. So inventory won’t be much of a problem, the numbers wouldn’t be too complex to crunch, and you haven’t even broken even to be able to pay for the services of a professional.

As a business owner, besides making profit and amassing customers and leads, there are several intricate things you should be knowledgeable about. These things have the capacity to determine whether or not your business stays open and even how much you can make from your customers and sales.

One of these things is your value-added tax. Complying with the revenue office on your business’s VAT will save your business from the troubles of fines, penalties, and non-compliant charges that can significantly hinder its growth.

However, this compliance ends not only with paying VAT for all your products. It also includes completing the appropriate registrations and submitting the necessary files to the revenue as and when due.

Some of the information the revenue office may require from your business as touching value-added tax includes:


Upon starting up your business, you should register for VAT according to the different thresholds tenable in your region. Your VAT registration will be based on your type of business and whether or not you have crossed the VAT threshold prevalent in your area. You can either register as a sole proprietorship or partnership with Form TR1 or as an incorporated company via Form TR2.

As a matter of fact, registering for VAT early, especially during setup, can make your business eligible for VAT returns on your setup expenses.

Invoices and VAT Filing

You may not be asked to provide every single invoice with VAT returns. But you must correctly charge VAT on your products and services and keep the necessary documents for up to 6 years, as they can be requested at any time.

Keep accurate records of all documents on your business transactions that can affect your tax and deductibles. These documents include the ones you give to your customers and the ones you receive from them, such as:

  • Invoices
  • Receipts
  • Bank statements
  • Account books
  • Credit notes
  • Any proof of purchase or sales within your business

Also, ensure to compute your annual returns and Intrastat and the EU VIES returns for transactions you perform outside Ireland but within the EU borders.

Keep your compliance authorisations safe, and ensure to renew each of them before their due date to avoid penalties and fines.


Invariably, your business can get penalised when you fail to complete one or more of the following VAT requirements:

  • Completion of your VAT registration as and when due.
  • Accurate record keeping of your transactions.
  • Timely submission of VAT returns.
  • Meeting the stipulated VAT obligations for your receipts and invoices.
  • Adopt appropriate VAT charges.
  • Leave non-deductibles as they are, but try to include them in your tax returns deductibles. Examples of business expenses you may not deduct from your tax filing include payments made on food, entertainment, ineligible accommodation, vehicle and petrol purchase or hire (as the case may be).
  • Record VAT on transactions imported into Ireland as reverse-charge returns.
  • Meet the requirements for zero-rating exported supply.


To avoid the fees, penalties, and charges accompanying VAT non-compliance, it is best to hire the services of a professional tax adviser. Hiring a qualified accountant or bookkeeper from the very start of your business will also ensure that you keep all the necessary documents intact, ready to stay compliant.