Non-established builders and subcontractors
The Value-Added Tax (VAT) treatment of non-established builders, subcontractors depends on whether they are subject to Relevant Contracts Tax (RCT) or not.
Construction services not subject to RCT
Non-established traders engaged in construction services in the State that are not subject to RCT are required to register and account for Irish VAT.
Examples are as follows:
- A non-established builder who builds an extension for a private individual should charge and account for Irish VAT on the supply.
- A non-established electrician who installs a new alarm system in a shop should charge and account for Irish VAT on the supply.
Construction services subject to RCT
Non-established traders engaged in construction operations as subcontractors are not required or entitled to account for VAT on such services when supplied to a principal contractor. The principal contractor will account for the VAT due.
Non-established subcontractors commencing work in the State, who only provide services to principal contractors are not obliged to register for VAT. However, they will be required to register for the purpose of reclaiming VAT.
As many construction service providers are involved in different types of contracts, it is important to be aware of how the system operates. For example, a builder may be acting as principal in one contract, as a subcontractor in another and supplying services that are not subject to RCT under another contract.
Where RCT is deducted it should be calculated on the VAT exclusive amount.
Published: 25 February 2019
A non-established trader is not required to register for Value-Added Tax (VAT) where:
- he or she supply goods in the State which are installed or assembled with or without a trial run, by or on behalf of the trader
- the recipient of those goods in the State is:
- a VAT-registered person
- a Government Department or a local authority
- a body established by statute
- an exempt person.
Typical examples include the supply, installation and assembly of:
- exhibition stands
- movable shop counters
- computer systems
- electrical generators.
Instead, the customer must register and self-account for the VAT due.
However, if the customer is a private individual, the non-established trader must register and account for Irish VAT.