VAT is one of those things that feels simple until it is not. You charge it, you reclaim it, you hand the difference to Revenue every two months. Then a subcontract job comes in where you are told not to charge VAT at all, or your turnover creeps up and you realise you should have registered months ago, and suddenly it is a lot less simple. For a field service business in Ireland, getting VAT right is worth real money, both in the tax you can legitimately claim back and in the penalties you avoid.
Most VAT guidance online is written for the UK, all HMRC and £90,000 thresholds, and none of it applies here. Ireland runs its own system through Revenue, with its own rates, its own thresholds, and one particular wrinkle for construction and trade work that catches people out badly. This guide covers what an Irish field service business actually needs to know, in plain terms. It sits alongside our other guides for Irish operators, from business grants across Ireland and Northern Ireland to electrical certification in Ireland.
You must register for VAT once your turnover crosses the relevant threshold in any rolling 12-month period, and the key word is rolling. Not your calendar-year figure or your accounting-year figure, but the total across any twelve consecutive months, checked continuously.
As of January 2026, the thresholds rose. For a business supplying services, which covers most field service and trades work, the threshold is €42,500. For a business supplying goods, it is €85,000. Where you do both, the split matters, and you should take advice on which applies, though most service businesses will hit the services figure first. Cross it, and you must register with Revenue through ROS, the Revenue Online Service.
The trap here is the backdating. Because the threshold works on a rolling basis, it is easy to sail past it without noticing, and Revenue can require you to register from the date you actually crossed, not the date you got around to it. That means VAT becomes due on invoices you already issued without charging it, and you either go back to clients to collect it, which is awkward and sometimes impossible, or you swallow it out of your margin, a 23% hit on work already done. The fix is simple: watch your rolling 12-month total continuously, and act as you approach the line rather than after you have crossed it.
There is also voluntary registration, which can make sense even below the threshold. Where most of your customers are themselves VAT-registered businesses, or you have heavy input costs like tools, a van, or fit-out during a start-up phase, registering voluntarily lets you reclaim that input VAT. That calculation is worth running rather than assuming registration is always something to delay.
Ireland has several VAT rates, but a field service business mostly meets two of them.
The standard rate is 23%, and it applies to most goods and services that do not fall into a reduced category. That is your default.
The one that matters most for trades is the reduced rate of 13.5%, because it applies to a lot of construction, installation, repair, and maintenance work. Building and construction services generally fall here, as do many repair and maintenance jobs. That gap from the standard rate is meaningful, and applying the wrong one causes real problems: charge 23% where 13.5% applies and you overcharge your customer, charge 13.5% where 23% applies and you underpay Revenue and face an assessment later. If your work spans different types of job, be clear which rate each one attracts rather than defaulting everything to 23%.
One rule here catches trades out more than any other, and you need it clear before you quote: the two-thirds rule. If the cost of materials, excluding VAT, comes to more than two-thirds of the total VAT-exclusive price of a job, the whole job is charged at 23%, not 13.5%, even though it is installation work. For a supply-and-fit business where the parts are expensive relative to the labour, a job you assumed was 13.5% can tip into 23% because of the material split. Checking that ratio before you price and invoice is what keeps you on the right side of it.
There are lower rates too, a 9% rate and a super-reduced 4.8% rate that applies to agricultural work, but for most field service businesses the 23% and 13.5% rates are the ones that come up day to day. When a job's classification is not obvious, check Revenue's guidance, because rate misclassification is one of the most common ways trades get VAT wrong.
The upside of being registered is that you reclaim the VAT you pay on business purchases, your input VAT, and set it against the VAT you charge customers. For a field service business buying tools, materials, parts, and equipment, that adds up.
The core rule is that you can reclaim VAT on purchases made for your taxable business activity, provided you hold a valid VAT invoice for each. No valid invoice, no reclaim, which is why keeping every purchase invoice, properly, is not optional. Revenue can ask to see them, and a reclaim you cannot document is a reclaim you lose.
There are things you cannot reclaim, or can only partly reclaim. VAT on certain passenger motor vehicles is restricted, food and drink, entertainment, and some other categories are blocked or limited, and anything bought for private rather than business use does not qualify. Where something is used partly for business and partly privately, you can only reclaim the business proportion. The practical point is that reclaim is generous on genuine business costs but has clear edges, and guessing at those edges is where businesses get caught in an audit.
Good record-keeping turns into real money right here. Every reclaim you make has to be backed by a valid invoice you can produce on demand, and the business that captures and stores those cleanly reclaims everything it is entitled to, while the business running on a shoebox of faded receipts leaves money on the table and struggles when Revenue asks questions. Keeping job costs and purchase records organised as you go is what makes VAT returns quick and reclaims complete rather than a bi-monthly scramble.
This is the wrinkle that has no real UK-identical equivalent, and it trips up field service businesses doing subcontracted construction work. If you do this kind of work, read this part twice.
In the Irish construction sector, VAT on subcontracted work is handled under what is called the reverse charge, and it is tied to Relevant Contracts Tax, RCT. When a subcontractor provides construction services to a principal contractor, and those services fall within RCT, the subcontractor does not charge VAT on the invoice. Instead, the principal contractor self-accounts for the VAT directly to Revenue on their own VAT return, and reclaims it at the same time where they are entitled to. Revenue's manual on the VAT treatment of construction services sets out the detail and worked examples.
In practice this means two different things depending on which side of the job you are on. If you are the subcontractor, you invoice the principal without adding VAT, and your invoice must state that the VAT is to be accounted for by the principal contractor, wording along the lines of "VAT on this supply to be accounted for by the Principal Contractor." You show your VAT number but no VAT rate or amount. If you are the principal contractor receiving the work, you calculate the VAT yourself, usually at 13.5% for construction, and put it on your own return as VAT on sales, then claim the matching deduction as VAT on purchases in the same return.
Get this wrong and it is a genuine mess. Charge VAT when the reverse charge applies and you have collected tax you should not have, creating a reclaim problem for your customer and an error for you. Miss it the other way and you have underdeclared. The reverse charge only applies to construction services within RCT, so work outside that, ordinary services to customers who are not principal contractors, is charged normally. Knowing which of your jobs fall inside RCT and which do not is the thing to be clear on. If you are moving into subcontracted construction work, get an accountant to walk you through it once so your invoicing is right from the start.
Registered businesses file a VAT return, the VAT3, and for most that happens every two months through ROS, due by the 23rd of the month following the period. From April 2026, electronic filing through ROS is mandatory, so paper filing is no longer an option. Some businesses can arrange different filing frequencies, but bi-monthly is the default most fall into.
The compliance basics are straightforward but unforgiving. File on time, pay on time, keep your records, and apply the right rates. Late or incorrect returns attract Revenue penalties plus interest on unpaid VAT, and the interest rate on late VAT is not trivial. None of this is hard when your underlying records are clean and your rates are right; it becomes hard, and expensive, when they are not, which is the recurring theme of getting VAT right generally. The businesses that find VAT painless are simply the ones whose day-to-day records are already in order, so the return is a matter of pulling figures together rather than reconstructing a period from memory.
VAT for an Irish field service business comes down to a handful of things done consistently. Register when your rolling 12-month turnover crosses €42,500 for services, and watch that figure continuously so you are not caught out by backdating. Charge the right rate, remembering that a lot of construction, installation, and repair work sits at 13.5% rather than the standard 23%. Reclaim the input VAT you are entitled to, and hold a valid invoice for every euro of it. Finally, if you do subcontracted construction work, understand the reverse charge, because that is the one that catches people hardest.
None of it is beyond any business owner, but all of it rewards good records and punishes bad ones. Get the systems right so every job's costs, invoices, and VAT are captured as you go, and VAT becomes a routine bi-monthly task. Leave it to a shoebox and a deadline, and it becomes a source of overpaid tax, missed reclaims, and avoidable penalties. For the equivalent rules across the water, our guide to reclaiming VAT in the UK covers the HMRC system, and if you operate on both sides of the border, you are dealing with both.
This guide is general guidance, not tax or financial advice, and VAT rules and rates change. For the current position and anything specific to your business, always check the latest guidance from Revenue or consult a qualified accountant or tax adviser before making decisions.
You must register once your turnover exceeds the relevant threshold in any rolling 12-month period. As of January 2026, the threshold is €42,500 for services, which covers most field service and trades work, and €85,000 for goods. The figure is measured continuously across any twelve consecutive months, not per calendar year, so it is important to monitor it as you approach the line. If you cross it, Revenue can require you to register from the date you actually crossed, which means VAT can become due on invoices you already issued without it.
Much construction, installation, repair, and maintenance work falls under the reduced VAT rate of 13.5%, rather than the standard 23% rate. That distinction matters for trades, because charging the wrong rate causes problems either way: too high and you overcharge the customer, too low and you underpay Revenue. Because rate classification is one of the most common VAT errors, confirm the correct rate for each type of job with Revenue's guidance or an accountant rather than defaulting everything to 23%.
In the Irish construction sector, VAT on subcontracted services within Relevant Contracts Tax (RCT) is handled under the reverse charge. The subcontractor does not charge VAT; instead, the principal contractor self-accounts for the VAT directly to Revenue on their own return and reclaims it there where entitled. If you are the subcontractor, you invoice without VAT and state that the VAT is to be accounted for by the principal contractor. If you are the principal, you calculate the VAT (usually 13.5% for construction) and include it on your return. It applies only to construction services within RCT, not to ordinary services.
You can reclaim the VAT paid on purchases made for your taxable business, such as tools, materials, parts, and equipment, provided you hold a valid VAT invoice for each. Some categories are restricted or blocked, including VAT on certain passenger vehicles, entertainment, and food and drink, and anything used privately rather than for business cannot be reclaimed, or only the business proportion can. Keeping valid invoices for every purchase is essential, because a reclaim you cannot document is one Revenue can disallow.
The two-thirds rule determines whether a job is charged at the reduced 13.5% rate or the standard 23% rate. If the cost of materials, excluding VAT, is more than two-thirds of the total VAT-exclusive price of the job, the entire job is charged at 23%, even though it involves installation or construction work. If materials are two-thirds or less of the price, the reduced 13.5% rate generally applies to the whole supply. For supply-and-fit businesses where parts can be expensive relative to labour, checking this ratio before quoting and invoicing is important to apply the correct rate.
Most VAT-registered businesses file a VAT3 return every two months through ROS, the Revenue Online Service, due by the 23rd of the month following the two-month period. From April 2026, electronic filing through ROS is mandatory. Some businesses can arrange different filing frequencies, but bi-monthly is the standard. Late or incorrect returns attract Revenue penalties and interest on any unpaid VAT, so filing accurately and on time, backed by clean records, matters.