How to calculate your VAT relief
You must calculate the amount of your VAT relief yourself.
If your company's turnover is €10,000 or less, your relief equals all the paid-in VAT for the entire accounting period. In this case, you do not need to calculate the relief.
However, not all paid-in VAT counts towards the relief. For example, the VAT paid on EU purchases (=intra-Community acquisition) cannot be included in the VAT relief calculation. In the same way, the reverse-charged VAT paid by the buyer for purchases in the building, construction, and scrap metal sectors cannot be included. However, VAT deductible from EU purchases, and VAT deductible from purchases under the reverse-charge scheme are taken into account.
If your turnover is between €10,000 and €30,000, you can use this Excel worksheet to calculate your VAT relief.
You will need the following information to calculate the relief:
company turnover for the accounting period (not including VAT)
amount of VAT included in the accounting period's sales
amount of VAT included in the purchases made by the company during the accounting period (only purchases relating to business activity)
the length of the accounting period (if necessary, adjust the turnover to correspond to a 12-month accounting period)
If your turnover is more than €10,000 but less than €30,000, you receive a partial relief.
If you file your VAT and relief in MyTax, it will calculate your VAT relief automatically for you.
You will only need to use this formula if you file on paper:
tax – (turnover – €10,000) × tax
The threshold amount of turnover that entitles companies to VAT relief was changed on 1 January 2016. Before 2016, the threshold was €22,500. Turnover of €8,500 or less qualified for full VAT relief.
The previous threshold of €8,500 applies to any accounting period that started prior to the 2016 calendar year. If your company turnover was €8,500 or less during such an accounting period and you are liable to pay VAT, you will receive a relief equal to the period's VAT in full, i.e. the amount of taxes on sales with the taxes on purchases deducted. In this case, the relief is not calculated with the formula below.
If your turnover is more than €8,500 but less than €22,500, you will receive a partial VAT relief. The relief amount is determined by this calculation formula:
tax – (turnover – €8,500) × tax