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VAT Related Tips

Compulsory Registration

  • Threshold for the VAT registration is Euro 15,600. 

 

Prior Registration Expenses 

The VAT incurred on services and fixed assets prior to the VAT registration of the business (company or self-employed person) can be claimed as follows;

  • up to 6 months for services received prior to registration; and
  • up to 2 years for goods acquired prior to registration.

 

Deadlines

VAT returns must be submitted 40 days after the period or quarter end.

 

VAT Penalty

Not paying the VAT amount due on time (through the quarterly VAT returns) renders immediately payable 10% penalty and interest on the amount payable.

This penalty should always be avoided as it is the most significant penalty imposed by the Income Tax and VAT Office; as a percentage and in absolute terms.

 

European Union

  • Intrastat

Imports and exports of goods with value more than Euro 100,000 and Euro 55,000 in a calendar year must be reported via the EU Intrastat mechanisms.

 

  • VIES

Services offered by an EU VAT registered member to another EU VAT register member requires registration with the EU VIES system.

 

Property Related

  • Acquisition of Primary Residence

Reduced VAT rates apply on the acquisition and/or construction of residences for use as the primary and permanent place of residence. Such conditions vary each year so it is better to consult with us before signing up the property purchase agreement.

 

  • Repairs
    • ​​New Residences

Renovation and repair of private residences is carried at the reduced rate of VAT of 5%

 

  • Old Residences

The reduced rate of 5% applies for renovation and repair of old private residences subject to the following conditions:

  • a period of at least three years has elapsed from the date of the first use of the residence
  • residence is used as the place of residence of vulnerable groups, or
  • residence is in remote areas

 

  • Transfer Fees

Are currently reduced by 50% until further notice by the government.

Do not apply if the transaction is subject to VAT

 

Transfer fees tax brackets

  • from parents to children – Nil
  • between spouses – 0,1%
  • between third degree relatives – 0,1%
  • to trustees €50
 
 
  • VAT 

VAT does not apply on resales whilst a 19% VAT is charged on new properties.

 

Important Note

VAT is a very complex tax area which should always be discussed with VAT experts. The above information serves only for informative purposes. Please contact us and we will advise you accordingly.