What is the two-thirds rule?
Goods are often supplied in the provision of a service, for example, parts in a washing machine repair job.
There are certain rules in relation to how this transaction is taxed for Value-Added Tax (VAT) purposes.
If the cost of the goods used in carrying out the work exceeds two-thirds of the total price:
- the rate which applies to the goods then applies to the entire transaction.
If the costs of the goods used in carrying out the work does not exceed two-thirds of the total price:
- the rate which applies to the service then applies to the entire transaction.
This is known as the two-thirds rule.
Source Revenue.ie
Latest Posts in "Ireland"
- VAT Treatment of Room Hire: Standard Rate Applies from January 2026 in All Venues
- Updated VAT Guidance for Qualifying Apartments, Construction, and Related Services Following Finance Act 2025
- Government Warned VAT Cut for Hospitality Would Cost Taxpayers Dearly and Create Administrative Issues
- Irish Revenue Clarifies VAT Recovery Rules for Employers Managing Occupational Pension Schemes
- Irish Revenue Limits VAT Group Membership to Establishments Located in Ireland Only
