Simple Guides

Who is responsible for VAT?

The rules relating to VAT on services are different (and more complex) than those relating to goods.

From 1 January 2010 there is a general place of supply rule depending on whether the customer is a business or a consumer. If you are an Irish business and acquire general rule services from Northern Ireland, then the place of supply will be Ireland.

You must then account for the VAT under the reverse charge mechanism. an Irish consumer then the place of supply will be where the supplier is based i.e. Northern Ireland and they will charge UK VAT. There are some exceptions to this general rule.

The main exceptions relate to:

  • Land / Property related services.
  • Passenger transport.
  • Cultural / educational events.
  • Hire of means of transport.
  • Service involving physical performance.
  • Restaurant and catering services.

However please note that this is a highly complex area and you should seek professional advice regarding the VAT implications of the services you are acquiring. Further information can be found on the Revenue’s website at www.revenue.ie or on www.revenue.ie/en/tax/vat/leaflets/place-of-supply-of-services.html

Boxes ES1 and ES2 on your VAT return are used to record EC transactions of services.

However, if you are an Irish consumer then the place of supply will be where the supplier is based i.e. Northern Ireland and they will charge UK VAT unless they are also registered for VAT in Ireland in which case in which case Irish VAT applies.

Additional rules have also been introduced from 1 January 2015 for suppliers of digital services to non- VAT registered customers in other EC countries. Some examples of digital services include:

  • Online advertising
  • Distance maintenance of programmes or equipment
  • Sale of images or text, such as photos, eBooks, films and games

The above rules apply to services provided within the EU Single Market and therefore this may change when the UK leave the EU on 29 March 2019. See Section 18 for more detail.