VAT Reclaim – Republic of Ireland

Ireland, an Island in the North Atlantic is the third largest Island in all of Europe. To the East it is separated from Great Britain by St. George’s Channel, the North Channel, and the Irish Sea.

Northern Ireland is part of the United Kingdom and represents 1/6 of the Island also called the Republic of Ireland. In a census, taken in 2011, Ireland’s population was 6.6. Million, making it the second most populated island in Europe after Great Britain. Approximately 4.8 million people live in the Republic of Ireland, with just over 1.8 million living in Northern Ireland.

The productivity level of Ireland labor wise is the third highest in Europe. Ireland’s economy is most focused on knowledge, with the vast majority of services in the high tech, financial services and life sciences arena.

US multinational corporations are major contributors to Ireland’s economy, comprising 14 of the top 20 Irish firms. These corporations also directly employ 25% of the labor force in the private sector, accounting for 80 percent of all business taxes and creating just under 60 percent of the non-agriculture sector’s OECD value add.

A solid indicator of a country’s financial strength is its minimum wage rate. See the chart below for a good indication of the rise of the minimum wage in the Republic of Ireland.

Business travel to Ireland is booming. A lot of it has to do with promotion. Here is an interesting article sure to offer insight:: Ireland Promoted as Business Travel Destination

The VAT Factor

As a business located within the EU or out of it, you need to ensure that your accounting department is consistent and has all the processes in place in order to reclaim VAT (Value Added Tax), which is a huge revenue generator for countries globally.

In the EU it has been somewhat of a tedious process to reclaim VAT. There are so many rules and regulations per country on what is redeemable and what is not.

Some countries, such as Austria  have certain districts where percentages of VAT reclaim differ from the rest of the country. Communication wise, Belgium, for example has 3 different official languages that need to be addressed when reclaiming VAT.

For this post, as you probably have guessed, we are going to focus on Ireland (The Republic of Ireland).

Business Travel

Your company’s employees travel. No matter if you have 1,5, 10 or 20 or more salesmen or execs travelling throughout the year, you need to ensure that all VAT expenses are processed, so they can be reclaimed.

This handy guide provides phrases in a number of EU spoken languages to ensure that your employees obtain the correct documents when they purchase goods and/or services.

Your employees should know for example that when paying for accommodations such as hotels, they need to do so at the physical location and obtain the correct documentation. They must do this to ensure the VAT they pay is redeemable.

For your execs that do a lot of traveling, you might want to provide them with tips . on how to have a stress-free trip. Those delays, security check-ins, cancellations and layovers can certainly add to it.

 

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Source: TRAVEL & TOURISM: ECONOMIC IMPACT 2018 – IRELAND

A business trip is not a vacation. Sure, your employees may have a good dinner and drink in the evening, but a lot of preparation goes into planning a trip. Sometimes, your execs may have to be present and alert at a 9AM conference to speak to 500 people in Dublin and then in London  for a board meeting in the afternoon.

They need to know what clothes to pack for the weather. They don’t want to be running or rushing anywhere. Everything needs to run like clockwork. One slight error or appearing too tired can mean a lost deal.

VAT Rates

The Republic of Ireland relies heavily on FDI (Foreign Direct investment) and has drawn a large number of multinational companies because of its highly educated labor force. It also levies a low tax rate for corporations:

The VAT rates in Ireland are as follows:

  • Standard Rate of 23%
  • Reduced Rates of 13.5%, 9%, 4.8% and 0%

For businesses and EU Member States and Non-EU member states:

WHAT IS RECOVERABLE

  • Phone
  • Conferences
  • DDP
  • Certain Goods and Services (Reduced Rates)

Minimums and time limits vary for companies registered in the EU and out of the EU.

We’ve surveyed a select group of clients and they’ve noted the following issues hamper them from getting reimbursed for VAT.

  • Language Barriers
  • Inability to get a hold of various administrations
  • Their own accounting departments are ill-informed on various tax technicalities from country to country
  • Overwhelming amount of paper and other necessary documents
  • Lost receipts

Those are just a few of the issues.

One thing unites all of the businesses we surveyed. All of them wish for a seamless technological solution so they do not leave that VAT money on the table.

To learn more on how to successfully recover VAT expenses in the EU feel free to download this eBook on VAT reclaim in Ireland and other EU countries.