VAT refund for a business

[rizzo]

Hi

I'm an Irish business, planning to sell a digital information product, probably 99% of my customers will be from outside Ireland. I wasn't planning to register for VAT yet.

To find my customers, I'd like to advertise on Facebook.

However, Facebook's guidelines state that since my business address is in Ireland, I'll be charged VAT on my advertising purchases. Which obviously is a problem and puts be at a big disadvantage against competitors.

I've browsed the Revenue Commissioners website and have seen that it's possible to get a VAT refund for qualifying activities. However, I can't figure out if I'd qualify or not?

From my point of view, it would be logical to expect that I could claim a VAT refund for all clicks I pay for from outside Ireland, but not for the Irish clicks.

Does anybody know my actual position?

And when would I need to register for VAT? Once my EU sales reach a certain threshold?

Thanks!

Rizzo

 

[DannyL]

And when would I need to register for VAT? Once my EU sales reach a certain threshold?

If your turnover is higher than €75,000 a year for the supply of goods (or €37,500 for services) than you're obligated to register for VAT.

If no VAT refund would put you in a big disadvantage against competitors as you say then register your company for that purpose. It doesn't cost anything to register or file a return.

From the Revenue website:

What is the turnover threshold for VAT registration?

The principal thresholds applicable are as follows:
(a) €37,500 in the case of persons supplying services,
(b) €37,500 for persons supplying goods liable at the reduced or standard rates which they have manufactured or produced from zero rated materials,
(c) €37,500 for persons making mail-order or distance sales into the State,
(d) €41,000 for persons making intra-Community acquisitions,
(e) €75,000 for persons supplying goods,
(f) €75,000 for persons supplying both goods and services where 90% or more of the turnover is derived from supplies of goods (other than of the kind referred to at (b) above) and
(g) A non-established person supplying taxable goods or services in the State is obliged to register and account for VAT irrespective of the level of turnover.

A taxable person established in the State is not required to register for VAT if his or her turnover does not reach the appropriate threshold above. However, they may opt to register for VAT.

 

[mathepac]

If your turnover is higher than €75,000 a year for the supply of goods (or €37,500 for services) than you're obligated to register for VAT ...

No issue there - once you pass the threshold for your particular goods or services then you must register.

...
If no VAT refund would put you in a big disadvantage against competitors as you say then register your company for that purpose. It doesn't cost anything to register or file a return. ...

This is less clearcut IMHO.

If your customers are unregistered end-users / consumers, once you register, irrespective of any threshold, you must charge VAT on sales, putting you at an even bigger disadvantage.

If you are selling to registered business outside Ireland, then they will expect to purchase from you VAT-free once they supply you with a valid registration number. In order to supply a VAT invoice, you must be registered.

If you are unregistered then how you manage your costs is up to you (VAT charged to you would be a cost not recoverable other than from sales revenues).

It is seldom clear-cut at the start-up stage IME (not an accountant BTW)