Does non-EU turnover count in the VAT registration threshold?

[Yam_Naem]

I provide freelance consulting services to various businesses, 100% of whom are located outside the EU. This year, my income has increased to the point where I'm now close to the VAT registration turnover threshold of €37,500. I've tried digging around online to see if there's a more granular definition of the VAT threshold but I can't find anything.

This leads me to conclude that I'll probably have to register for VAT even though I won't have to collect any VAT because the businesses are all non-EU ones, which doesn't seem to make much sense. So is the VAT turnover threshold independent of where your turnover comes from? Thanks for any help.

 

[jfrank]

I provide freelance consulting services to various businesses, 100% of whom are located outside the EU. This year, my income has increased to the point where I'm now close to the VAT registration turnover threshold of €37,500. I've tried digging around online to see if there's a more granular definition of the VAT threshold but I can't find anything.

This leads me to conclude that I'll probably have to register for VAT even though I won't have to collect any VAT because the businesses are all non-EU ones, which doesn't seem to make much sense. So is the VAT turnover threshold independent of where your turnover comes from? Thanks for any help.

Yam, I am in a similar but different boat. I am 4 years self-employed and crossed the €37,500 threshold for the first time just 6 months into my current financial year (year to 31 July22) so, I am wondering is my whole turnover back to Aug21 now subject to Vat even though back last August I would not have known I would cross the €37k threshold?

 

[ryaner]

Generally only the turnover from the date you pass the threshold is due. You generally wouldn't be able to go back to previous clients and request vat after the fact.

IMO Revenue will likely consider any income you have towards the threshold, irrespective of the source. They already have a zero rate threshold for you if you acquiring services from abroad - https://www.revenue.ie/en/vat/vat-r...f-goods-or-services-acquired-from-abroad.aspx

 

[jfrank]

Generally only the turnover from the date you pass the threshold is due. You generally wouldn't be able to go back to previous clients and request vat after the fact.

IMO Revenue will likely consider any income you have towards the threshold, irrespective of the source. They already have a zero rate threshold for you if you acquiring services from abroad - https://www.revenue.ie/en/vat/vat-r...f-goods-or-services-acquired-from-abroad.aspx

I hope you're right with the term "generally"! I charge an vat inclusive fee so, in real terms that is an income reduction from when I crossed the threshold. I will have to revise pricing to deal with this service but first of all, I wanted to avoid a backdated vat liability.

Thanks.

 

[peemac]

The maximum backdating is to the beginning of the vat period. So 1st May, 1st July, 1st sept etc.

They won't be overly concerned with a small amount over the threshold before registering.

I'd be looking at registration from 1st July

 

[jfrank]

The maximum backdating is to the beginning of the vat period. So 1st May, 1st July, 1st sept etc.

They won't be overly concerned with a small amount over the threshold before registering.

I'd be looking at registration from 1st July

I do 6-monthly vat returns so, backdate the vat liability to January then? January is actually quite close to when I crossed the threshold.

 

[ryaner]

I do 6-monthly vat returns so, backdate the vat liability to January then? January is actually quite close to when I crossed the threshold.

When you apply to Revenue for the vat registration you actually specify a date that the registration starts. You can pick the date you passed the threshold and bill with Vat forward of that date.
The bi-annual return period will still need to be entered as starting from the 1st of Jan, their systems are really picky. My last vat registration required a few 0 vat returns to get up the point when the business started trading - there was a long delay in the application being processed.

 

[jfrank]

When you apply to Revenue for the vat registration you actually specify a date that the registration starts. You can pick the date you passed the threshold and bill with Vat forward of that date.
The bi-annual return period will still need to be entered as starting from the 1st of Jan, their systems are really picky. My last vat registration required a few 0 vat returns to get up the point when the business started trading - there was a long delay in the application being processed.

Thanks Ryaner. I had already registered back 4 years ago and actually paid Net Vat for maybe the first 1 or 2 bi-annual returns. I eventually figured that I was not over the threshold and submitted NIL returns since. Now in my next bi-annual I will have a liability as I have definitely crossed the threshold so, I am going to take it that I have to return/pay vat for Jan - June this year..... I hope this is right?

 

[T McGibney]

Thanks Ryaner. I had already registered back 4 years ago and actually paid Net Vat for maybe the first 1 or 2 bi-annual returns. I eventually figured that I was not over the threshold and submitted NIL returns since. Now in my next bi-annual I will have a liability as I have definitely crossed the threshold so, I am going to take it that I have to return/pay vat for Jan - June this year..... I hope this is right?

If you've been registered for VAT for the past 4 years, you should have been accounting for and remitting VAT throughout that period regardless of whether or not your turnover exceeded the threshold at any given point.

 

[jfrank]

If you've been registered for VAT for the past 4 years, you should have been accounting for and remitting VAT throughout that period regardless of whether or not your turnover exceeded the threshold at any given point.

Oh dear