ACE Money Transfer
ACE Money Transfer
17 Aug 2026
VAT plays an important role in the Irish economy and affects consumers, freelancers, online sellers, and businesses alike. It applies to most goods and services in Ireland, including shopping, professional services, imports, and online purchases.
Ireland uses a multi-rate VAT system where different products and services are taxed at different rates. Businesses registered for VAT must charge the correct rate and submit VAT returns to the Revenue Commissioners.
This guide explains how VAT works in Ireland, current VAT rates, VAT on imports and property, VAT exemptions, and how businesses can reclaim VAT correctly.
VAT (Value Added Tax) is an indirect tax charged on most goods and services in Ireland. It is included in the final price and collected by businesses on behalf of the government.
VAT is included in most prices in Ireland
Consumers pay VAT, while businesses collect it
Different VAT rates apply depending on the product or service
VAT may apply to imports from outside the EU
9% VAT: Applies to gas and electricity until 31 December 2030, and to food, catering, hairdressing services, and qualifying apartment sales from the applicable dates.
This information is correct as of the time of publication and is subject to change. Please verify current VAT rates before making decisions.
VATis a percentage-based tax added to the selling price of goods and services.
VAT is charged at each stage of sale
Businesses collect VAT and pay it to Revenue
Businesses can reclaim VAT paid on eligible purchases
Standard VAT rate in Ireland: 23%
Product price: €100
VAT (23%): €23
Final price paid by customer: €123
Manufacturer adds VAT when selling to wholesaler
Wholesaler adds VAT when selling to retailer
Retailer charges final VAT to consumer
Consumer pays the total VAT amount
VAT Rate | Applies To |
| 23% (Standard Rate) | Alcohol, fuel, electronics, cosmetics, furniture, jewellery, tobacco, toys, non-oral medicines |
| 13.5% (Reduced Rate) | Heating oil, vet services, building services, cleaning, car hire |
| 9% (Reduced Rate) | Gas & electricity, heat pump installation, brochures, maps, hospitality services |
| 4.8% (Agricultural Rate) | Livestock, greyhounds, horse hire |
| 0% (Zero Rate) | Books, newspapers, children’s clothes, bread, tea, coffee, exports, oral medicines, disability aids |
No VAT applies to:
Medical services
Educational services
Financial services
Some live performances
Zero-Rated | VAT-Exempt |
| VAT charged at 0% | No VAT charged |
| Businesses can reclaim VAT | VAT cannot be reclaimed |
VAT rates and rules are regulated by the Revenue Commissioners.
VAT applies to many goods imported into Ireland from outside the EU. Customs duty and excise duty may also apply.
All imported goods are subject to VAT
Customs duty applies on goods over €150
VAT may be prepaid through the IOSS system
Alcohol and tobacco may have excise duty
VAT usually paid in country of purchase
Irish VAT may apply if thresholds are exceeded
Special rules apply to alcohol, tobacco, and vehicles
€430 (15+) / €215 (under 15) duty-free limit
Above limit ? VAT + customs duty on full value
No limits for personal use
No extra VAT in Ireland
Exceptions: vehicles, alcohol, tobacco
Gifts up to €45 are usually VAT-free
Above €45, VAT and import charges apply
All rules are regulated by the Revenue Commissioners.
New houses usually include 13.5% VAT
Budget 2026 reduced VAT on apartments to 9% (until 31 Dec 2030)
No VAT applies on second-hand or “old” properties
No VAT on land/site purchases
VAT applies only if part of a developer agreement exists
VAT may apply if a new property is resold within 5 years
Applies only if not lived in for at least 2 years
Residential rent is not subject to VAT
Stamp duty is charged only on the base property price before VAT is added.
Example:
House price: €227,000
Base price: €200,000
VAT: €27,000
Stamp duty applies only to €200,000
Some individuals can reclaim VAT in special cases
People with disabilities may claim VAT refunds on certain aids
Businesses registered for VAT can reclaim VAT on eligible purchases
VAT refund and registration details are available on the Revenue website
Incorrect VAT handling can lead to penalties and compliance issues.
Charging the wrong VAT rate
Missing VAT filing deadlines
Poor bookkeeping
Incorrect invoices
Misunderstanding VAT exemptions
Businesses unsure about VAT rules should seek professional advice.
VAT affects the final price consumers pay for:
retail shopping
restaurants
online purchases
utility bills
professional services
Most prices in Ireland already include VAT, so consumers usually see the final amount upfront.
VAT differs from taxes such as income tax or corporation tax because it is consumption-based.
VAT | Income Tax |
| Paid on purchases | Paid on earnings |
| Indirect tax | Direct tax |
| Included in prices | Deducted from income |
| Paid by consumers | Paid by workers/businesses |
Why VAT Matters in Ireland
Understanding VAT helps consumers and businesses:
Avoid costly mistakes
Stay compliant with Irish tax rules
Manage finances more effectively
Understand pricing and import costs
VAT (Value Added Tax) is a key part of Ireland’s tax system and applies to most goods and services, including everyday purchases, online shopping, professional services, and imported products. Whether you are a consumer or a business owner, understanding how VAT works can help you make informed financial decisions and accurately manage costs.
For businesses, knowing the correct VAT rates, registration thresholds, filing requirements, and available exemptions is essential for maintaining compliance with Revenue rules. For consumers, understanding VAT can provide greater transparency about pricing and the taxes included in purchases.
As VAT regulations continue to evolve, staying informed is essential for better financial planning and avoiding unnecessary costs.
Alongside understanding taxes and financial obligations in Ireland, choosing a trusted international money transfer service also matters. ACE MoneyTransfer helps users send money worldwide quickly, securely, and at competitive exchange rates.
VAT is calculated by applying the relevant Irish VAT rate to the selling price of taxable goods or services.
Freelancers must register for VAT if their annual turnover exceeds the Irish VAT registration threshold for services.
Online purchases in Ireland are generally subject to the standard 23% VAT rate unless reduced or zero-rated categories apply.
Yes, VAT-registered small businesses can usually reclaim VAT on eligible business-related purchases and expenses.
Failing to file a VAT return on time may result in penalties, interest charges, and possible Revenue compliance action.
Disclaimer: This article is intended for general informational and educational purposes only and should not be construed as legal, regulatory, tax, business, or financial advice. While reasonable efforts have been made to ensure that all facts, figures, and data are accurate and valid as of the date of publication, no warranty or guarantee is given as to the ongoing completeness, accuracy, or currency of the information.
The content is based on information available at the time of publication. Regulations, government policies, market conditions, and service offerings may change over time and vary across jurisdictions and providers. As a result, some information may no longer be current or applicable. Readers should independently verify all information and consult qualified professional advisors before making any financial, legal, or business decisions.
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