TAXATION: VAT Codes, TAX Certs, PSWT, RCT

VAT Codes for Purchase Orders and Invoices

University of Galway is required to self-account for VAT on all intra-community purchases of goods  and services and on all world-wide purchases of services. This means that University of Galway must self-account for VAT at the appropriate rate (23%, 13.5% or 9%) on invoices received from EU suppliers (goods and services) and World-Wide suppliers (services) and pay this VAT over to Irish Revenue. This self-accounted VAT is a non-recoverable additional cost. Invoices from businesses  should be received without any VAT charge and University of Galway  has to self-account for VAT at the appropriate rate on the transaction.

VAT on goods purchased outside the EU (i.e. U.S.A., Australia, Mainland UK) is collected by Revenue at point-of-entry to the state, i.e. it must be pre-paid before the goods are permitted to pass through customs. Goods coming from these non-EU states will normally be cleared through customs by a freight company/customs clearance agent.  The EORI is the number used by customs authorities and economic operators to control the entry and exit of goods within the European Union for companies and individuals operating through this territory.  University of Galway's EORI number is IE0022578J.  Further information is available on the Procurement website, outlining what is required here.

Except on certain vatable research accounts, the University cannot recover the cost of VAT on purchases

• Application of the correct tax code to relevant documents is essential. The tax code should be provided by the purchaser, not added by accounts office personnel.
• When keying in requisitions, the amount entered is the VAT EXCLUSIVE value. By entering the below codes, the system calculates the VAT as appropriate*.

   

  	Regular Departmental Expenditure and Research Contracts - Non-Reclaimable VAT		Certain Vatable Research Contracts - Reclaimable VAT
  Purchases of Goods or Services from suppliers based in Ireland (26 counties)	P1	VAT added on @ 13.5%	P3	VAT added on @ 13.5%
  	P2	VAT added on @ 23%	P4	VAT added on @ 23%
  	P5	VAT added on @ 9%	P6	VAT added on @ 9%
  	P0	VAT not applicable - 0%	P0	VAT not applicable - 0%
  	If the supplier is registered for VAT in Éire, they will add it to their invoice. For purchases of goods  from outside the EU where  VAT is levied at customs use P0 See note 3 below
  Purchase of GOODS from EU and Northern Ireland suppliers outside of Ireland (26 counties)1	U1	VAT added on @ 13.5%	U3	VAT added on @ 13.5%
  	U2	VAT added on @ 23%	U4	VAT added on @ 23%
  	U5	VAT added on @ 9%
  	The invoice from the supplier should not charge VAT. Note, if there are "add-on" costs to delivering the goods, e.g., courier service, then those costs should be treated as part of the cost of the goods and not as a separate invoice. If VAT is not applicable, please use P0.
  Purchase of SERVICES from EU outside of Ireland (26 counties)1,2	F1	VAT added on @ 13.5%	F3	VAT added on @ 13.5%
  	F2	VAT added on @ 23%	F4	VAT added on @ 23%
  	The invoice from the supplier should not charge VAT. Note, if there are "add-on" costs to providing the service, then those costs should be treated as part of the cost of the service and not as a separate invoice. If VAT is not applicable, please use P0.
  Purchase of Goods or Services from outside the EU2,3 excluding purchases of Goods from Northern Ireland	I1	VAT added on @ 13.5%	I3	VAT added on @ 13.5%
  	I2	VAT added on @ 23%	I4	VAT added on @ 23%
  	The invoice from the supplier should not charge VAT.  For services University of Galway will self account for VAT.  Include the appropriate VAT code on the Purchase Order. Note, if there are "add-on" costs to delivering the goods, e.g., courier service, then those costs should be treated as part of the cost of the goods. For goods, If VAT is not applicable, please use P0 see note 3 below.
  Purchase of Construction Services both inside and outside the State.	T1	VAT added on @ 13.5%	T3	VAT added on @ 13.5%
  	T2	VAT added on @ 23%	T4	VAT added on @ 23%
  	VAT Rules for construction services (Reverse Charge System) apply to Principal Contractors (University of Galway) and sub-contractors invloved in construction activities to which Revlevant Contract Tax (RCT) applies. The invoice from the supplier should not charge VAT and must contain the statement "VAT ON THIS SUPPLY TO BE ACCOUNTED FOR BY THE PRINCIPAL CONTRACTOR".  In order to register a contract with Revenue please complete RCT Form‌‌ and return with invoice(s) if available to Accounts Payable (for internal use only).

NOTES

1. The supplier should be provided with University of Galway's VAT number IE0022578J. This is included on the Purchase Order document. 
2. There are a number of exceptions where VAT is applied in a foreign country for services supplied. The University does not have to pay VAT to Irish Revenue (self-assess) in this case. Some examples include:
   • Conferences in foreign countries
   • Hotel accommodation and food
   • Passenger transport (bus and rail tickets, etc.)
3.  For purchases of goods  from outside the EU where  VAT is levied at customs  and other applicable charges are paid by the courier on behalf of University of Galway. In this case, the correct VAT code on the Purchase Order to the supplier is P0. The courier will invoice your department separately for the VAT and other applicable charges, once they have received a valid University of Galway Purchase Order.

Tax Clearance Certification

This is written confirmation from the Revenue that a company’s tax affairs are in order at the date of issue. It is a requirement that a Tax Clearance Certificate is obtained from suppliers with whom more than €10,000 worth of business is placed in any 12-month period. Please inform suppliers at time of ordering of potential Tax clearance requirements.

Payments held awaiting Tax Clearance Certificates will be paid in the next scheduled payment run following receipt of such certificates.

For further information on Tax Clearance Certification, see revenue website: https://www.revenue.ie/en/starting-a-business/tax-clearance/index.aspx

For information on Non-Resident Tax Clearance Certification see: https://www.revenue.ie/en/starting-a-business/tax-clearance/how-to-apply-for-a-tax-clearance-certificate/non-resident-applications.aspx

Professional Services Withholding Tax (PSWT)

Under the Taxes Consolidation Act 1997 Professional Services Withholding Tax (PSWT) must be deducted by the University from payments made to Professional Service Providers. PSWT must be deducted from the entire payment, including any element which is for the reimbursement of expenses incurred. This applies even where expenses are invoiced separately.

Where a non-resident is not chargeable to tax in the State for the year/period in which the PSWT is deducted, repayment of the PSWT may be claimed from Revenue.  Credit for PSWT deducted (revenue.ie)

The current rate of PSWT is 20%.

Please see the Revenue website for further details on Professional Services Withholding Tax.

Relevant Contracts Tax (RCT)

University of Galway is obliged to operate a scheme of RCT on payments to sub-contractors in construction and related industries.

In order to register a contract with Revenue, please complete RCT Form and return with invoice(s) if available to Accounts Payable (for internal use only).

Please see the Revenue website for further details on Relevant Contracts Tax (RCT).