ABC Ltd receives consultancy services from a German business and is charged €100,000.
ABC Ltd is required to account for the Irish VAT in its Irish VAT return as follows:
- Consultancy fee on the invoice = €100,000
- Rate of Irish VAT = 23%
- 100,000 @ 23% = €23,000
- Amount of Irish VAT = €23,000
ABC Ltd includes the VAT on the consultancy service in their VAT return (T1 - Sales). ABC Ltd may also be able to reclaim the VAT in the same VAT return (T2 - Purchases).