If your business in Ireland sells more than €42,500 worth of services, or more than €85,000 worth of goods, in a calendar year, you must register for VAT. Below those limits registration is optional. This guide sets out every threshold Revenue currently applies, how turnover is counted, and how to register.
Key facts
- Services: €42,500 a year.
- Goods: €85,000 a year. The same limit applies if you sell goods and services and at least 90% of your turnover comes from goods.
- Goods you make from zero rated materials and sell at the standard or reduced rate: €42,500.
- Distance sales to consumers in other EU countries (and cross-border telecoms, broadcasting and electronic services): €10,000, counted across the whole EU.
- Goods bought in from other EU countries: €41,000.
- Turnover is measured excluding VAT, over a calendar year.
- You register online through ROS: form TR1 for sole traders and partnerships, form TR2 for companies.
Budget 2027 update: the thresholds were not changed in Budget 2027, announced on 6 October 2026. See Budget 2027: what it means for Irish businesses.
The VAT registration thresholds in full
Revenue applies different limits depending on what you sell and who you sell it to. These are the principal thresholds:
| Type of business activity | Annual threshold |
|---|---|
| Supplying services only | €42,500 |
| Supplying goods | €85,000 |
| Supplying goods and services, where 90% or more of turnover is from goods | €85,000 |
| Supplying goods taxed at the standard or reduced rate that you made from zero rated materials | €42,500 |
| Distance sales of goods and cross-border TBE services to consumers in other EU states | €10,000 (EU wide) |
| Acquisitions of goods from other EU member states | €41,000 |
The €10,000 limit only applies to a supplier that is established in one EU member state. It is calculated on the total of those sales to customers in all EU countries combined, not country by country.
How your turnover is counted
To check whether you have crossed a threshold, add up the value of the following, excluding VAT, over a calendar year:
- supplies of taxable goods and services
- supplies of immovable goods
- certain financial transactions
- insurance and reinsurance services.
Some transactions are left out of the calculation. The most common one for small businesses is the occasional sale of a business asset, such as a building, a vehicle or a machine.
Revenue gives this example: a trader sells goods worth €70,000 in a calendar year and also sells a delivery van once off for €20,000. Total sales are €90,000, but the van is an incidental sale of a business asset, so it is ignored. The trader’s turnover for threshold purposes is €70,000, which is below the €85,000 limit for goods.
Businesses that sell both goods and services
If you sell a mix, the higher €85,000 limit only applies when at least 90% of your turnover comes from goods. A café that also runs paid workshops, or a shop that offers installation, should check that split carefully. If services make up more than 10% of turnover, the €42,500 limit is the one to watch.
Registering below the threshold
You can choose to register for VAT even if your turnover is below the limits. Two situations make this worth considering:
- Start-up costs. If you have set up a business but have not yet made any taxable sales, you must be registered to reclaim the VAT on your start-up purchases. Registering early lets you claim credit for VAT on purchases made before trading begins.
- Business customers. If you mainly sell to VAT registered businesses, they can usually reclaim the VAT you charge, so registering may not make you more expensive to them.
If most of your customers are consumers, registering voluntarily means adding VAT to your prices or absorbing it, so do the sums first. A business that only carries out VAT exempt or non taxable activities generally cannot register. Farmers and sea fishers are not generally obliged to register, although they can choose to.
How to register for VAT
- Get access to ROS. Registration for businesses established in Ireland is done online through the Revenue Online Service, either by you or by your tax agent.
- Choose the right form. Use TR1 if you are a sole trader, partnership, trust or individual. Use TR2 if you are a limited company.
- Set the date. Registration generally takes effect from the date you state on the form. It can be backdated only in certain circumstances, by agreement with your Revenue office.
- File and pay online from then on. Once registered, VAT returns and payments must be made electronically.
Paper applications are returned unless there are exceptional circumstances. Businesses not established in Ireland use paper forms TR1(FT) or TR2(FT), sent to the Business Taxes Registrations Office in Wexford. If any of your registration details change, you must tell your Revenue office within 30 days.
Businesses not established in Ireland
A business that is not established in Ireland but supplies taxable goods or services to taxable customers here must register for Irish VAT whatever its turnover, unless it uses the EU VAT SME Scheme.
Common mistakes to avoid
- Counting turnover including VAT. The thresholds apply to turnover excluding VAT.
- Using the goods limit for a services business. The €85,000 figure only applies if at least 90% of turnover comes from goods.
- Forgetting EU online sales. Sales to consumers in other EU countries have their own €10,000 limit across the whole EU.
- Waiting until year end to check. Keep a running total of turnover so you can register on time. Backdating is only possible in limited cases.
Frequently asked questions
Is the VAT threshold based on profit or turnover?
Turnover. It is the total value of your taxable sales, excluding VAT, in a calendar year, not what you have left after costs.
Do sole traders and companies have the same VAT thresholds?
Yes. The thresholds depend on what you sell, not on your legal structure. Sole traders and partnerships register on form TR1, companies on form TR2.
Can I register for VAT before I start trading?
Yes. Revenue allows a new business that has not yet made taxable supplies to register so it can reclaim VAT on start-up costs.
Does selling an old van or machine count towards the threshold?
No. Occasional disposals of business assets such as buildings, vehicles or machines are excluded from the turnover calculation.
Can the thresholds change?
Yes. VAT thresholds are set by law and can be changed in the annual Budget, so check Revenue’s current figures when you are close to a limit.
Related guides
- How to start a business in Ireland
- Sole trader vs limited company in Ireland
- How to set up a limited company in Ireland
- How to register a business name in Ireland
- Preliminary tax in Ireland explained
Sources
- Revenue: What are the VAT thresholds?
- Revenue: Who should register for VAT?
- Revenue: How do you register for VAT?
Figures checked against Revenue guidance in October 2026. This guide is general information, not tax advice. For your own situation, speak to an accountant or contact Revenue. More business guides and news in our Business section.
