VAT on Services B2B

The rules in relation to VAT on services are potentially complicated. The place where VAT is charged depends on the nature of the service. This may, in some cases, require registration by the trader in the other jurisdiction even under the existing rules.

The basic rule is that VAT is chargeable, where the supplier is established. However, there are many exceptions, so that the main rule might seem to be the exception. The exceptions often operate by deeming the place of supply to be elsewhere, sometimes in a way that might seem intuitively surprising.

This default rule is changed with respect to B2B sales within the European Union. In this case, the place of supply is where the VAT registered recipient customer is established provided that the relevant proofs are obtained, and conditions satisfied.

In the case of supplies to businesses established in the United Kingdom after Brexit, a broadly similar rule applies in most cases. Provided the services are supplied to a tax registered business, then the supply is zero-rated in Ireland.

The position in respect of services received from a UK supplier is the reverse of the above. The United Kingdom legislation provides that services rendered to and received from the EU are treated in the same way as those rendered to or received from business established outside the EU prior to Brexit

VAT on Services B2C

The position in respect of supplies of services to non-business customers is dependent on the nature of the service concerned. There are special rules in some cases, which deem the service to be supplied in a particular EU state at present. Broadly similar rules will apply in Ireland and UK after Brexit so that in some cases the place of supply is deemed outside of Ireland/European Union and in the United Kingdom.

The effect of the place of supply being deemed outside of Ireland may be that the trader has to register for VAT in the place concerned in the case of sales to a non-VAT registered persons/consumer. It is possible to register for VAT as a non-established supplier and it is mandatory in many cases. There is generally no turnover threshold where such mandatory registration applies.

Electronic services are deemed supplied where the consumers are resident. It is possible for a non-EU business (UK post Brexit) to register in one EU state under a special scheme which remits VAT to all these states in accordance with the breakdown of in the respective states concerned.

As with goods, in the case of business to business supplies of services, it will be critical for the supplier of the service to obtain evidence that the customer is established outside European Union/in the UK post-Brexit. Revenue will require evidence of checks and verification.

Exceptions to State of Establishment Principle

The default rule to which there are many exceptions is that VAT is chargeable in the place where the supplier is established i.e. Ireland in the case of an Irish established business and the UK in the case of a UK established business.

Certain services are not subject to VAT in the state of establishment of the supplier when supplied to non-business customers established outside the EU (GB post-Brexit) including

  • transfers of intellectual property
  • advertising services
  • services of consultants and engineers’ lawyers and accountants and like services
  • data processing in the provision of information
  • banking financial and insurance transactions
  • supply of staff
  • The hiring of movable property except for means of transport telecommunications services
  • radio and television broadcasting services
  • electronically supplied services

In the above cases, it may be necessary to register in the place concerned.

Place of Supply Rules

Certain services are subject to special rules and are deemed to be supplied in a state with which they are closely connected.  They include the following

  • artistic sporting scientific-educational entertainment (where the services are supplied/events takes place
  • services in connection with real property such as architectural services conveyancing
  • work on movable goods
  • certain transport and handling services
  • e-commerce services where received

Use and enjoyment rules.

The place of supply is where the use and enjoyment take place.

  • the hiring of goods including
  • means of transport
  • telecommunications services

The corollary of the above is that when an unestablished trader provides services in the State, it may be obliged to register for and account for VAT in Ireland. This can apply where

  • goods are imported into the state
  • goods are supplied in the state
  • distance selling to a person who is not a taxable person
  • supply of services in connection with immovable property e.g. estate agents architectural certain building services
  • cultural, artistic sporting scientific entertainment catering services physically carried out in the state
  • the hiring of movable goods for use in the state
  • the supply of telecommunication services
  • the supply of electronic services from outside the EU to a private individual resident in Ireland including,
  • website supply supplying software,
  • the supply of images text and information,
  • the supply of distance teaching,


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