VAT for tradespeople in Ireland: 13.5%, 23% and the two-thirds rule

01The rates you’ll use

Ireland has a standard rate of 23%, a reduced rate of 13.5% and a second reduced rate of 9%, among others. For most trades, two of them matter.

13.5% for the work. Revenue’s manual puts construction services at the reduced rate. That covers construction work in general, renovating and repairing buildings, maintenance, installing plumbing, heating and electrical services, and supplying and fitting fixtures. The same manual names building, electrical, plumbing, plastering, heating, painting, roofing and flooring as construction services.

23% for goods on their own. Building materials supplied without the work, scaffolding, and fittings (supplied, fitted, or both) are charged at the standard rate.

02Fixtures or fittings?

The word matters, because it changes the rate.

A fixture is part of the building: it can’t be removed without real damage to itself or to the building. Revenue’s list includes boilers, baths that aren’t freestanding, built-in kitchen units and wardrobes, doors and windows, electrical wiring with sockets and fuse boards, radiators and storage heaters, sinks, and wooden floors fixed down. Supplying and fitting a fixture is charged at 13.5%, subject to the two-thirds rule below.

A fitting can come off without damage. Revenue’s examples include bathroom fittings like towel holders and shelving, blinds, curtains, cookers, hobs and ovens, dishwashers (even plumbed in), mirrors, and lighting other than recessed lights. Fittings are charged at 23% whether you supply them, fit them, or both.

Revenue says both lists are examples for guidance, not complete. If a job has an item you’re not sure about, check the manual or ask Revenue.

03The two-thirds rule

Most jobs mix work and materials. A plasterer brings bags of plaster; a plumber brings a boiler. The two-thirds rule decides which rate the whole job takes.

Look at what the materials cost you, before VAT. Compare it with the total price you’re charging the customer for the job, also before VAT.

• If the cost of the materials is more than two-thirds of the price, the whole job is charged at the rate for the goods, usually 23%.
• If it is two-thirds or less, the whole job is charged at the rate for the service, 13.5% for building work.

It’s the cost to you that counts, not the price you put on the materials. Revenue’s own example is a €300 job where the materials cost €220: that is more than two-thirds of €300, so all €300 is charged at 23%.

Revenue’s construction manual says to always consider the two-thirds rule when you invoice building work. It also says the rule does not apply to work you do as a subcontractor under RCT (the main contractor accounts for the VAT), or to work between connected people, such as relatives or companies under the same control.

A quick way to check: multiply the materials cost by 3 and the job price by 2. If the first number is bigger, you’re over two-thirds.

04Worked examples

These are made-up jobs to show the sums. Prices and costs are before VAT.

The first two jobs stay at 13.5%. Two-thirds of €2,950.00 is about €1,966.67, and the boiler in the second job cost €1,700.00, under the line.

In the third job the boiler cost €2,100.00, over the line, so the whole €2,950.00 goes at 23%: €678.50 VAT and €3,628.50 in total, instead of €398.25 VAT and €3,348.25 at 13.5%. The customer pays €280.25 more for the same price before VAT, so it’s worth knowing before you quote.

If you sell some goods on their own on the same job, say a box of tiles the customer will lay themselves, that line is a separate supply of goods at 23%. Your quote and invoice then show the VAT for each rate.

05Not registered for VAT?

If you’re not registered, you don’t charge VAT, and your quotes and invoices shouldn’t show any. Revenue is clear that a trader who isn’t registered and shows VAT on an invoice is liable for that VAT.

Registration is obligatory once your turnover goes over the threshold. Turnover is counted over a calendar year, before VAT. The thresholds are:

Construction work is a service, so most trades use the services threshold. You can also choose to register while you’re under the threshold. Whether that suits you depends on your customers and costs, so it’s a good one to ask an accountant.

06Working for a main contractor

If you work as a subcontractor for a main contractor, and Relevant Contracts Tax (RCT) applies to the payments, VAT works differently. It’s called the reverse charge:

• You don’t add VAT to your price, and the main contractor pays you without VAT.
• If you’re VAT registered, your invoice shows everything a VAT invoice normally shows except the VAT rate and the VAT amount. It includes your VAT number and the words “VAT on this supply to be accounted for by the principal contractor”.
• The main contractor accounts for the VAT in their own VAT return.

The two-thirds rule doesn’t apply to these jobs. Work for a homeowner or a business that isn’t a principal contractor is charged under the normal rules above.

07Other rates you might meet

A few jobs use the second reduced rate of 9%. Revenue’s manual lists supplying and installing heat pump heating systems, and, from 26 November 2025 to 31 December 2030, building qualifying apartments. Solar panels have their own guidance too. If your work includes any of these, read Revenue’s pages for the details before you quote.

Rates can change in a Budget. The current rates page shows the date each rate applies from.

08What QuotePaid does for you

In QuotePaid you mark each line as labour, materials, or supply and fit. QuotePaid uses 13.5% for the job, checks the two-thirds rule from the materials on the quote, and if they’re over two-thirds it asks you to confirm before the whole job goes at 23%. A materials line can be set as sold on its own at 23%, and mixed rates show VAT for each rate. Not registered? Choose that in your VAT settings and VAT disappears from your quotes and invoices.

QuotePaid only knows what you charge for materials, not what they cost you. If you mark up your materials, the real cost may be under two-thirds even when the price is over, so check your own figures when it asks.