Quick answer
- A VAT-registered business can generally reclaim VAT only where the purchase is used for taxable business activity.
- A valid VAT invoice or other permitted evidence is normally required.
- Personal use, exempt activity and specifically excluded expenses can restrict or block recovery.
- Irish input VAT is generally claimed through VAT3, and Revenue applies a four-year time limit to claims.
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Who can reclaim VAT?
VAT recovery is generally available to a VAT-registered business where goods or services are used for taxable supplies. The business needs a valid invoice, must be the proper recipient of the supply and must keep records supporting the business purpose.
An amount labelled “VAT” is not automatically deductible. Recovery can be restricted when the business makes exempt supplies, uses the purchase privately, has mixed business and private use, or falls within one of Revenue’s excluded categories.
Costs commonly allowed, restricted or excluded
| Cost type | General recovery check |
|---|---|
| Stock, materials and taxable business services | May be reclaimable where used for taxable business activity and supported by valid invoices. |
| Mixed business and private cost | Only the qualifying business proportion may be deductible. |
| Cost linked to exempt activity | Recovery may be restricted and apportionment may be required. |
| Food, drink and personal services | Generally excluded except in specified circumstances. |
| Entertainment | Generally excluded. |
| Passenger cars | Generally excluded unless a specific qualifying use or recovery provision applies. |
| Petrol | Generally excluded unless held as stock-in-trade; other motor-fuel rules differ. |
| Accommodation | Generally excluded, with limited exceptions such as qualifying conference accommodation. |
How to claim VAT through VAT3
- Check that the business and registration are entitled to recover the VAT.
- Match the purchase to a valid VAT invoice or permitted import evidence.
- Remove private, exempt or blocked portions.
- Record the deductible amount in the correct VAT period and include it in T2.
- Reconcile the VAT-control account and retain the invoice and supporting records.
Revenue generally applies a four-year limit to repayment claims. Do not delay a review of omitted input VAT, and do not insert an old claim into a current return without checking the correct correction process.
Mixed use and partial recovery
If a cost supports both taxable and exempt activity, or both business and private use, only the qualifying portion may be recoverable. The apportionment method should be reasonable, consistent and supported by records.
For example, if €230 VAT is charged on a cost and only 60% relates to taxable business activity, the starting recoverable amount may be €138, subject to the cost not being excluded and the method being appropriate.
Business reclaim, tourist refund and foreign VAT
This guide covers an Irish business reclaiming input VAT through its VAT records. It is not the same as a traveller using the Retail Export Scheme, nor does an Irish VAT3 automatically recover every amount of foreign VAT charged abroad.
If a foreign supplier charged VAT unexpectedly, first check whether the invoice should have used reverse charge and whether it can be corrected. Foreign VAT refund procedures are separate from ordinary Irish input-VAT recovery.
Frequently asked questions
What VAT can a business reclaim in Ireland?
A VAT-registered business can generally reclaim VAT on purchases used for taxable business activity, subject to valid evidence, business-use limits and Revenue exclusions.
Can I reclaim VAT without a VAT invoice?
A valid VAT invoice or other evidence permitted by Revenue is normally required. A bank payment or ordinary receipt alone may not support the claim.
Can I reclaim VAT on a car or petrol?
VAT on passenger cars and petrol is generally restricted, although specific qualifying activities, vehicle rules or stock-in-trade treatment can change the result.
How far back can I reclaim VAT in Ireland?
Revenue generally applies a four-year time limit to repayment claims. Check the correct period and correction process before claiming an old amount.
Can I reclaim VAT on mixed business and personal costs?
Only the qualifying business portion may be recoverable, and the cost must not be otherwise excluded. Keep evidence for the apportionment.
Sources & references
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