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Vat Registration Threshold

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  • 27-03-2018 10:57am
    #1
    irishmoss
    Closed Accounts Posts: 194 ✭✭


    When calculating the threshold for Vat registration do we include the cost of postage that the customer pays? We sell online and the customer pays the shipping cost on top of the product cost.

    I see the threshold for online business's is €35000 so if your postage costs are 5k can you subtract the 5k ? I'm thinking no but wanted to check this out


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    #2
    Homer
    Registered Users Posts: 4,306 ✭✭✭Homer


    It’s based on your turnover, so no you can deduct the €5k.
    As far as I can remember the threshold is €37500 for services and €75000 for products but I could stand to be corrected.


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    #3
    CeilingFly
    Closed Accounts Posts: 3,378 ✭✭✭CeilingFly


    If you are a retailer the threshold is €75,000 and that's the ex vat turnover.

    Assuming there is some vat element in your retail figures (unless you sell books, children's clothing/footwear or church candles, all of which are zero rated) then the actual threshold is higher when you look at your gross income.

    example - item costs you €60 + vat and you sell for €100, the vat you paid is worked into your price, so your net turnover on that item is 86.20 as 23% of €60 is 13.80.

    If all your products were at same margin, your threshold would be 87,000 gross turnover.


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