What is Value-Added Tax (VAT)?


VAT is a tax which is payable on the supply or importation of goods and on the supply of services within the territory of the Member States of the European Union (EU). The tax, in all cases, is ultimately payable by the final consumer of the good or service. Each party in the chain of supply (manufacturer, wholesaler and retailer) acts as a VAT collector.

They collect VAT from their customer and include that VAT in their VAT return to Revenue. When returning the VAT collected, they can reclaim as appropriate, VAT which has been charged to them by their suppliers.  

For VAT purposes, the territory of the State includes its territorial sea. The territorial sea of the State extends to a limit of 12 nautical miles.

This section explains:

  • who are taxable and accountable persons
  • exemption from VAT
  • reverse charge (self-accounting)
  • qualifying activities
  • and
  • VAT and fraud.

Next: Who are taxable and accountable persons?