Good day,
For the past two years our turnover has not exceeded €75,000 and we have not charged vat for this reason. Our tax year ends Oct 31st and we could be over the €75,000 by then. Our knowledge of whats happens next is a little unclear. I thought that maybe we would have to take declare 23% out of all sales over €75,000 until the end of tax year.
However today I read today that you can offset the vat that i paid from purchases of stock, from your sales (see below from revenue website) .
Does this apply to me if I don't charge vat?
Thanks in advance,
T
How is the threshold determined?
For the purposes only of deciding if a person is obliged to register for VAT, the actual turnover may be reduced by an amount equivalent to the VAT borne on purchases of stock for re-sale.
Example
Annual purchases of stock for re-sale €60,000 (VAT Inc.)
[€48,780.60 plus €11,219.40 VAT at the standard rate]
Actual turnover €80,000 (VAT Inc)
Less
VAT on stock for re-sale (€11,219.40)
Turnover €68,780.60
As the business’ turnover is below the registration limit of €75,000 after the deduction of €11,219.40 VAT charged to them on purchases of stock, the business is not obliged to register.
For the past two years our turnover has not exceeded €75,000 and we have not charged vat for this reason. Our tax year ends Oct 31st and we could be over the €75,000 by then. Our knowledge of whats happens next is a little unclear. I thought that maybe we would have to take declare 23% out of all sales over €75,000 until the end of tax year.
However today I read today that you can offset the vat that i paid from purchases of stock, from your sales (see below from revenue website) .
Does this apply to me if I don't charge vat?
Thanks in advance,
T
How is the threshold determined?
For the purposes only of deciding if a person is obliged to register for VAT, the actual turnover may be reduced by an amount equivalent to the VAT borne on purchases of stock for re-sale.
Example
Annual purchases of stock for re-sale €60,000 (VAT Inc.)
[€48,780.60 plus €11,219.40 VAT at the standard rate]
Actual turnover €80,000 (VAT Inc)
Less
VAT on stock for re-sale (€11,219.40)
Turnover €68,780.60
As the business’ turnover is below the registration limit of €75,000 after the deduction of €11,219.40 VAT charged to them on purchases of stock, the business is not obliged to register.