Whether you need a VAT number to sell online in Ireland depends on the size of your business and the nature of your sales. Let’s break it down clearly so you know exactly where you stand.
VAT Registration Thresholds in Ireland
In Ireland, you are legally required to register for VAT once your turnover reaches or is expected to reach the following thresholds:
- €80,000 per year for businesses supplying goods
- €40,000 per year for businesses supplying services
If your annual turnover is below these thresholds, VAT registration is optional — though you can choose to register voluntarily, which can be beneficial if you’re buying goods or services with VAT that you want to reclaim.
What If I Sell Below the Threshold?
If your online sales are below the relevant threshold, you don’t need to charge VAT to your customers. However, you should still be registered with Revenue for income tax purposes and file a self-assessment return annually. You also need to monitor your turnover closely — if you exceed the threshold at any point, you must register for VAT within a specific timeframe (typically within 30 days of knowing you’ll exceed it).
VAT and Shopify
Shopify has built-in tax settings that make it relatively straightforward to manage VAT. You can:
- Set Irish VAT rates (currently 23% standard rate, with reduced rates of 13.5%, 9%, and 0% for certain goods/services)
- Display prices inclusive or exclusive of VAT
- Automatically apply VAT rules to different customer locations
- Generate VAT reports to assist with your Revenue filings
Selling to EU Customers and VAT OSS
If your business sells to consumers in other EU countries, the rules changed in July 2021 with the introduction of the EU VAT One Stop Shop (OSS). Once your total EU cross-border sales exceed €10,000 per year, you must charge VAT at the rate of the customer’s country. The OSS scheme allows you to register once (in Ireland, through Revenue) and report VAT for all EU countries in one return.
Seek Professional Advice
VAT rules can be complex, especially if you’re selling internationally. We always recommend speaking with an Irish accountant or tax advisor before launching your store. At Grange Web Design, we can help you configure Shopify’s tax settings correctly once your accountant has advised you on your obligations. Talk to us about getting your Shopify store set up compliantly.
