Can I reclaim VAT on a car purchased for my business?

Generally, no. VAT on the purchase of a passenger car is specifically blocked in Ireland, even if the car is used entirely for business. You cannot reclaim any of the VAT. However, if you purchase a commercial vehicle (van, truck, or certain heavy goods vehicles), you can reclaim the VAT in full provided it is used exclusively for business purposes. The rules on cars also apply to related costs such as fuel — only 50% of VAT on petrol or diesel is reclaimable for cars used for mixed business/private use.

What is reverse charge VAT and when does it apply?

Reverse charge moves the VAT accounting responsibility from the seller to the buyer. It applies in Ireland for certain cross-border services received from non-Irish suppliers, construction services under the construction industry reverse charge, and some types of electronic services. Under reverse charge, the Irish recipient self-accounts for the VAT — meaning they declare both the output VAT and the input VAT in their return simultaneously, often resulting in no net payment.

What happens if I charge the wrong VAT rate?

Charging the wrong VAT rate is a compliance issue that Revenue can identify during an audit. If you have over-charged VAT, you may owe the excess to Revenue (as you collected it) and need to issue credit notes to customers. If you under-charged, you will typically owe Revenue the shortfall out of your own funds. Penalties and interest can apply. Revenue's eBrief publications and their VAT rates guide are good first references when you are unsure.

Are digital services and software subject to VAT in Ireland?

Yes. Digital services — including SaaS, streaming, apps, e-books, and online courses — supplied to Irish consumers are subject to the standard 23% VAT rate. If you sell to consumers in other EU countries, you are required to charge VAT at the rate applicable in the customer's country (via the EU One Stop Shop, or OSS, system). B2B digital services to VAT-registered EU businesses are covered by reverse charge and are effectively zero-rated at source.

🧾 TAX TOOLS · VAT CALCULATOR

VAT Calculator — Ireland 2026

Q: When must I register for VAT in Ireland?

In Ireland you must register for VAT when your turnover exceeds or is likely to exceed €40,000 in a 12-month period for services, or €80,000 for goods. You can also register voluntarily below these thresholds, which is worth doing if you have significant VAT-bearing costs and your customers are mainly VAT-registered businesses who can reclaim the VAT you charge.

Q: What VAT rate applies to construction and renovation work?

Construction, repair, and renovation of residential property is charged at the reduced rate of 13.5% in Ireland. New commercial construction is typically subject to the standard 23% rate. Certain energy efficiency upgrades such as heat pumps and insulation may attract the lower 9% rate — always check with Revenue if you are unsure, as misapplying the rate creates a liability.

Q: What is the difference between cash accounting and invoice accounting for VAT?

Under the standard invoice basis, VAT becomes payable in the period the invoice is issued, regardless of when you are paid. Under cash accounting (available to businesses with turnover under €2 million), you only account for VAT when you actually receive payment — and you can only reclaim input VAT when you have actually paid your supplier. Cash accounting helps cash flow for smaller businesses dealing with slow-paying customers but requires careful record-keeping.

Instantly add or remove Irish VAT at 23%, 13.5%, 9%, 0%, or any custom rate. See net, VAT amount, and gross in one click — with a full Irish VAT rate reference table and worked examples for businesses.

For guidance only — always confirm VAT treatment with your accountant or Revenue's online guidance before invoicing customers.

VAT Calculator

Mode

Add VAT to amount

Remove VAT from amount

Enter the net (ex-VAT) amount below.

Net Amount (ex-VAT) €

VAT Rate

Results

Enter an amount above to calculate VAT instantly.

Irish VAT Rates Quick Reference

Rate	Category	Examples
23%	Standard	Electronics, clothing, alcohol, most services, professional fees
13.5%	Reduced	Construction, renovation, tourism, short-term vehicle hire, funeral services
9%	Second reduced	Restaurants & cafes (food), newspapers, sport facilities, hairdressing
0%	Zero-rated	Food (unprocessed), children's clothing, books, medicines, oral medicines, exports
Exempt	Exempt	Education, health, financial & insurance services, postage stamps

What this calculator does

This tool handles the two most common VAT calculations that Irish business owners face every day:

Adding VAT to a net price: You know your price excluding VAT and want to know what to charge the customer.
Removing VAT from a gross price: You have a price that already includes VAT and need to know the net figure — for example, when booking out a purchase for your accounts, or when a supplier quotes a VAT-inclusive price.

It covers all four standard Irish VAT rates — 23%, 13.5%, 9%, and 0% — plus a custom rate field for special situations. The quick reference table on the right gives you the rate for the most common categories at a glance.

Who it's for: Sole traders, SME owners, bookkeepers, and anyone quoting for work in Ireland who needs to know whether their price is VAT-inclusive or exclusive and what the split looks like.

How the calculation works

Adding VAT (net → gross)

When you know the net (ex-VAT) price and want to find the gross (VAT-inclusive) price:

Gross = Net × (1 + VAT rate / 100)
VAT amount = Gross − Net

Example: €1,000 net + 23% VAT = €1,000 × 1.23 = €1,230 gross (VAT = €230)

Removing VAT (gross → net)

When you have a VAT-inclusive price and want to extract the net and VAT amounts:

Net = Gross ÷ (1 + VAT rate / 100)
VAT amount = Gross − Net

Example: €1,230 gross ÷ 1.23 = €1,000 net (VAT = €230)

Common error: To remove 23% VAT, you do NOT multiply by 77% (0.77). That gives the wrong answer. You must divide by 1.23. The difference: €1,230 × 0.77 = €947.10 (wrong). €1,230 ÷ 1.23 = €1,000 (correct).

Worked examples

Example 1 — Contractor adding 13.5% VAT to a renovation quote

A Dublin builder quotes €8,500 net for a kitchen renovation. The work attracts 13.5% VAT (residential construction). What does the client pay?

Item	Calculation	Amount
Net quote (ex-VAT)	—	€8,500.00
VAT @ 13.5%	€8,500 × 0.135	€1,147.50
Total to client	€8,500 × 1.135	€9,647.50

The contractor invoices €9,647.50, collects €1,147.50 VAT, and remits this to Revenue in their next VAT return.

Example 2 — Retailer removing 23% VAT from a shelf price

A hardware shop buys a drill for €246 including VAT. What was the net cost and how much VAT can they reclaim?

Item	Calculation	Amount
Gross price (inc-VAT)	—	€246.00
Net price (ex-VAT)	€246 ÷ 1.23	€200.00
VAT reclaimable	€246 − €200	€46.00

Example 3 — Restaurant applying 9% food VAT

A Cork restaurant serves a €16 meal. Revenue's VAT applies at 9% for food in a restaurant. The menu price is VAT-inclusive. What is the VAT on this item?

Item	Calculation	Amount
Gross menu price	—	€16.00
Net (ex-VAT)	€16 ÷ 1.09	€14.68
VAT @ 9%	€16 − €14.68	€1.32

If the restaurant sells 200 such meals per day, the daily VAT liability is approximately €264 — accounted for in bi-monthly VAT returns.

How to interpret your result

Cash flow impact: When you are VAT-registered, you collect VAT from customers on behalf of Revenue. This money is never truly yours — it passes through your business and must be remitted in your VAT return (usually bi-monthly for most businesses). Treat VAT collected as a liability on your books the moment you invoice.

Input VAT vs Output VAT: Output VAT is the VAT you charge on your sales. Input VAT is the VAT you pay on your purchases. Your VAT return settles the difference: if your output VAT exceeds input VAT, you pay the balance to Revenue. If input VAT exceeds output, Revenue refunds the difference — which is why VAT registration can be attractive even below the threshold for businesses with large upfront costs.

When you must register: Once your turnover exceeds €40,000 (services) or €80,000 (goods) in any 12-month period, registration is mandatory. Failure to register carries interest on unpaid VAT and potential penalties. Register early if you expect to cross the threshold soon.

Zero-rated vs Exempt — a critical difference: Zero-rated supplies (e.g. food, books) carry a 0% VAT rate, but the seller is still VAT-registered and can reclaim input VAT on associated costs. Exempt supplies (e.g. financial services, education) are outside the VAT system entirely — no VAT is charged, but input VAT on related costs cannot be reclaimed. Getting this wrong is one of the most expensive VAT mistakes a business can make.

Common mistakes & pitfalls

Using the wrong rate for mixed supplies: If an invoice covers items at different VAT rates (e.g. food at 0% and alcohol at 23%), each line must be rated correctly. A blanket rate applied to a mixed invoice will be wrong.
Forgetting VAT on services received from abroad: If you receive professional services from a non-Irish supplier (e.g. a UK consultant, US software provider), reverse charge applies. You must self-account for VAT even though no Irish VAT appears on the invoice.
Cash vs invoice basis confusion: If you are on invoice basis accounting, you owe VAT when you issue the invoice — not when you get paid. Many small businesses run into cash flow problems by not setting aside VAT as they invoice.
Applying 0% instead of Exempt: These are not the same thing. If your supplies are truly exempt, you should not be charging VAT at all and cannot reclaim associated input VAT. Charging 0% incorrectly can invalidate your return.
Not registering on time: Once you cross the threshold, you are liable for VAT from that point — even if you haven't registered yet. Revenue can issue an assessment for unremitted VAT plus interest from the date you should have registered.
Reclaiming VAT on entertainment: VAT on business entertainment is specifically blocked — you cannot reclaim it even if you have a valid VAT invoice. This applies to restaurant meals, event tickets, and corporate hospitality for customers.

Frequently Asked Questions

You must register for VAT when your turnover exceeds or is likely to exceed €40,000 per year for services, or €80,000 per year for goods. You can also register voluntarily below these thresholds, which is worth doing if you have significant VAT-bearing costs and your customers are mainly VAT-registered businesses who can reclaim the VAT you charge. Voluntary registration makes sense for many B2B service providers from day one.

Construction, repair, and renovation of residential property is charged at the reduced rate of 13.5%. New commercial construction is subject to the standard 23% rate. Certain energy efficiency upgrades — such as heat pumps, insulation, and solar panels — may attract different treatments depending on the supply arrangement. Always check with Revenue or a VAT-registered accountant if you are quoting for mixed-use property, as misapplying the rate creates a liability that comes out of your margin.

Generally, no. VAT on the purchase of a passenger car is specifically blocked in Ireland, even if the car is used entirely for business. You cannot reclaim any of the VAT. However, if you purchase a commercial vehicle (van, truck), you can reclaim the VAT in full provided it is used exclusively for business. For fuel, only 50% of VAT on petrol or diesel is reclaimable for cars used for mixed business/private use. Electric vehicles are subject to the same blocking rule.

Under the standard invoice basis, VAT becomes payable in the period the invoice is issued, regardless of when you receive payment. Under cash accounting (available to businesses with turnover under €2 million), you only account for VAT when you actually receive payment — and you can only reclaim input VAT when you have paid your supplier. Cash accounting improves cash flow for businesses dealing with slow-paying customers, but requires careful record-keeping and is not suitable for businesses that buy on long payment terms.

Reverse charge moves the VAT accounting responsibility from the seller to the buyer. It applies in Ireland for certain cross-border B2B services from non-Irish EU suppliers, some construction services under the construction industry reverse charge, and electronic services from outside Ireland. Under reverse charge, the Irish recipient self-accounts for VAT — declaring both the output VAT and the input VAT on the same return, which usually results in no net payment unless there is partial exemption involved.

Charging the wrong VAT rate is a compliance issue that Revenue can identify during an audit. If you have over-charged VAT, you may owe the excess to Revenue (as you collected it) and need to issue credit notes to customers. If you have under-charged, you will typically owe Revenue the shortfall out of your own margin. Penalties and interest apply in both cases. Revenue's VAT rates guide (available on revenue.ie) is the definitive reference.

Yes. Digital services — including SaaS, streaming, apps, e-books, and online courses — supplied to Irish consumers are subject to the standard 23% VAT rate. If you sell to consumers in other EU countries, you must charge VAT at the rate applicable in the customer's country. The EU One Stop Shop (OSS) scheme simplifies this by allowing you to file a single return covering all EU sales. B2B digital services to VAT-registered EU businesses are covered by reverse charge and are effectively zero-rated at source.

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VAT Calculator — Ireland 2026

VAT Calculator

Results

What this calculator does

How the calculation works

Adding VAT (net → gross)

Removing VAT (gross → net)

Worked examples

Example 1 — Contractor adding 13.5% VAT to a renovation quote

Example 2 — Retailer removing 23% VAT from a shelf price

Example 3 — Restaurant applying 9% food VAT

How to interpret your result

Common mistakes & pitfalls

Frequently Asked Questions

When must I register for VAT in Ireland?

What VAT rate applies to construction and renovation work?

Can I reclaim VAT on a car purchased for my business?

What is the difference between cash accounting and invoice accounting for VAT?

What is reverse charge VAT and when does it apply?

What happens if I charge the wrong VAT rate?

Are digital services and software subject to VAT in Ireland?

Related Finance Tools

VAT Guides for Irish Businesses

Automate Your VAT Returns with Notiva

Explore more calculators

Related reading

Built by a finance professional, for Irish SMEs.