In this article, you will equip yourself with knowledge about:

• What is VAT?
• What tax category is diesel in Ireland?
• How much is VAT on diesel in Ireland?
• Can you claim VAT on diesel and petrol?
• Why is diesel so expensive right now in Ireland?
• How to calculate VAT on diesel in Ireland?
• How to calculate VAT on diesel using the VAT Calculator

Introduction

Value Added Tax (VAT) is a tax on goods and services that is added to the price paid by consumers. VAT is a critical source of revenue for the Irish government and is used to fund public services, infrastructure, and other initiatives. VAT applies to many products and services, including fuel, and understanding how VAT applies to diesel fuel is crucial for both businesses and individuals.

What is VAT?

Before we dive into the specifics of VAT on diesel, let’s first define what VAT is. VAT is a consumption tax that is applied to the value added to goods and services at each stage of production and distribution. The seller is responsible for collecting and remitting VAT to the government. The VAT system in Ireland is governed by the EU VAT Directive, which sets the minimum VAT rate at 15%.

What Tax Category is Diesel in Ireland?

In Ireland, diesel is considered a mineral oil and is subject to several different taxes and levies, including excise duty, carbon tax, and VAT. Excise duty is charged on the volume of fuel and is paid by the distributor before it reaches the retailer. Carbon tax is charged based on the carbon content of the fuel, and VAT is added to the final price paid by the consumer.

How Much is VAT on Diesel in Ireland?

The current VAT rate on diesel in Ireland is 13.5%. This rate applies to all diesel purchases, including those made by businesses and individuals. It is essential to note that the VAT rate on fuel can change over time, and it is important to stay up-to-date with current rates.

Can You Claim VAT on Diesel and Petrol?

If you are a VAT-registered business, you can claim back the VAT paid on fuel purchases as input tax. This applies to both petrol and diesel. However, there are restrictions on claiming VAT on fuel purchases for private use. If the vehicle is used for both business and private use, you can only claim the portion of VAT that relates to business use. It is important to keep detailed records to support your VAT claims.

Why is Diesel So Expensive Right Now in Ireland?

The price of diesel in Ireland, like in other countries, can fluctuate based on several factors, including global oil prices, supply and demand, and taxes. In recent years, there has been a push towards reducing carbon emissions, which has led to increased taxes on diesel fuel. This, coupled with other factors such as Brexit and the COVID-19 pandemic, has led to higher diesel prices in Ireland.

How to Calculate VAT on Diesel in Ireland?

To calculate the VAT on diesel in Ireland, you can use the following formula:

VAT on diesel = (Cost of diesel x VAT rate) / (VAT rate + 100)

Let’s take an example to illustrate this. Suppose you purchase 100 liters of diesel at a cost of €1.50 per liter. The total cost of the diesel would be €150. To calculate the VAT, we can use the formula above:

VAT on diesel = (€150 x 13.5%) / (13.5% + 100%) = €20.25 / 113.5% = €17.85

Therefore, the VAT on the purchase of 100 liters of diesel at a cost of €1.50 per liter in Ireland is €17.85.

Using the VAT Calculator

If you find the above calculation a bit confusing, you can use the VAT calculator on our website to calculate the VAT on diesel purchases. It is a simple and easy-to-use tool that will give you the VAT amount instantly. All you need to do is enter the cost of the diesel and select the VAT rate of 13.5%. The calculator will then provide you with the VAT amount and the total cost, including VAT.

It is essential to stay up-to-date with current VAT rates and regulations to avoid any issues with compliance. If you have any questions or concerns regarding VAT on diesel or any other taxes, it is advisable to seek professional advice from a qualified accountant or tax specialist.

Conclusion

Understanding VAT on diesel in Ireland is crucial for both businesses and individuals. The current VAT rate on diesel is 13.5%, and businesses can claim back the VAT paid on fuel purchases as input tax. Diesel prices in Ireland can be affected by various factors, including global oil prices, taxes, and supply and demand. To calculate the VAT on diesel purchases, you can use the formula provided in this article or our website’s VAT calculator.

It is important to note that while diesel fuel is subject to several different taxes and levies, it remains a vital source of energy for many industries, including transportation and manufacturing. As Ireland continues to transition towards cleaner and more sustainable energy sources, there may be changes in the tax structure of diesel fuel. However, for the time being, understanding VAT on diesel in Ireland is a critical step towards ensuring compliance with tax regulations and making informed decisions about fuel purchases.