VAT question - 95% of services in USA

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dazzerb

Registered User
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I am a technology sole trader and 95%+ of my business is with USA clients. I have a very small amount of Irish income that is less than €5000 / year.

I am nowhere near the threshold of having to be VAT registered but my question is should I be?

My accountant is still not sure if I should be VAT registered since my overall income exceeds the threshold even though it is exempt from VAT.

Any thoughts here? Accountant mentioned that it may not be a bad thing to do anyway as there are some benefits of being VAT registered.

Any thoughts here?

Thanks!
 
dazzerb said:
My accountant is still not sure if I should be VAT registered since my overall income exceeds the threshold even though it is exempt from VAT.
Click to expand...

Do you pay your accountant for this advice?

The supplies to the US are zero rated rather then being exempt so if you pay VAT on purchases and you are not registered you can't recover that VAT if you were registered you could recover the VAT.

The VAT recovered may be so small to make very little difference to you.
 
I (we) are 100% aware that the USA work being VAT exempt. That's not a concern or a question.

Question has to do with the fact that I have some Irish income that is still under VAT limits and whether that changes anything for the overall picture. As it currently stands my situation could be flagged and I may have to explain everything to revenue. My tax situation is perfectly in order but If I VAT register even though I do not need to then revenue do not need to bother me.

Basically is the administration and paperwork for VAT worth doing? There are some benefits where I can then purchase equipment for my business and get VAT back but this is very minor.
 
You say exempt, I say zero rated.

You can elect to register for VAT and recover the purchase VAT based on the % of taxable sales over total sales.
 
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