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Value-Added Tax (VAT) registration is obligatory when your turnover exceeds, or is likely to exceed, the VAT thresholds. The thresholds depend on your turnover in any continuous 12 month period.
The threshold for intra-Community distance sales of goods and cross-border telecommunications, broadcasting and electronic (TBE) services relies on your turnover in a calendar year.
If the turnover is less than a threshold limit, you may elect to register for VAT.
The principal thresholds are as follows:
A person, while not established in the State, needs to register and account for VAT if that person supplies:
This applies irrespective of the level of turnover.
Your turnover figure may exceed the threshold limit. However, you may not be required to register for VAT.
For registration purposes, the turnover figure may be reduced by the amount of VAT paid on stock bought for re-sale. You should use this reduced turnover figure to see if you can register for VAT.
This adjusted turnover figure is used only for the purposes of determining your turnover for registration for VAT.
Michael has an annual turnover of €80,000.
He has incurred VAT on his stock purchased for re-sale in the amount of €11,220.
Michael can reduce his turnover figure by the €11,220 when determining whether he has breached the threshold.
€80,000 minus €11,220 equals €68,780.
As the adjusted turnover is below the registration limit of €75,000, he is not obliged to register.
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