VAT 23% standard, 13.5% reduced (construction), 9% second reduced (Revenue, 1 Jan 2026). RCT at 0%, 20% or 35% comes off the VAT-exclusive payment.
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How it is calculated
VAT:VAT = net × rate ÷ 100 · total = net + VAT — or, from a VAT-inclusive price, net = gross ÷ (1 + rate ÷ 100).
RCT: the principal contractor deducts the rate Revenue has set for that subcontractor from the gross payment, which is the VAT-exclusive amount where the reverse charge applies. RCT = VAT-exclusive payment × rate ÷ 100
Worked example: a subcontractor on the 20% rate invoices €1,000 for construction services under the reverse charge (no VAT on the invoice). RCT = €200.00; the principal pays the subcontractor €800.00 and sends €200.00 to Revenue, where it is credited to the subcontractor.
Which VAT rate for building work?
Revenue's manual on construction services uses the 13.5% reduced rate, subject to the two-thirds rule: if the VAT-exclusive cost of the goods supplied is more than two-thirds of the VAT-exclusive total price, the rate that applies to the goods applies to the whole job. Revenue states that the two-thirds rule cannot apply where the principal contractor accounts for the VAT under the reverse charge, and that under the reverse charge the sub-contractor's charge does not include VAT — the invoice instead states that VAT is to be accounted for by the principal contractor.
Common questions
Which VAT rate applies to construction work in Ireland?
Revenue's manual on construction services uses the 13.5% reduced rate, subject to the two-thirds rule: if the VAT-exclusive cost of the goods is more than two-thirds of the total VAT-exclusive price, the rate of the goods applies to the whole transaction. The two-thirds rule cannot apply where the principal contractor accounts for the VAT under the reverse charge.
What is RCT?
Relevant Contracts Tax. In construction, a principal contractor deducts tax from payments to a subcontractor at the rate Revenue sets for that subcontractor — 0%, 20% or 35% — and pays it to Revenue, where it is credited to the subcontractor.
Is RCT deducted before or after VAT?
On the VAT-exclusive amount. Under the RCT reverse charge the subcontractor's invoice carries no VAT: it states that the VAT is to be accounted for by the principal contractor.
Which RCT rate am I on?
Revenue sets it from your tax compliance record: 0% for an up-to-date record, 20% for a substantially up-to-date record, 35% for a poor record or if you have not registered with Revenue.
Do I need to charge VAT at all?
Only if you are registered for VAT. Revenue sets the registration thresholds — check revenue.ie for the current figures.
What GlideQuote does with this
GlideQuote is set up for Ireland: VAT invoices in euro at the rate you set, your logo and signature on the PDF, quotes that convert to invoices, and deposits or milestone payments for staged jobs.
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Sources
Revenue — Current VAT rates (23% / 13.5% / 9% from 1 January 2026): revenue.ie
Revenue — Tax and Duty Manual, VAT treatment of construction services (13.5%; sub-contractor's charge under the reverse charge does not include VAT; reviewed August 2026): PDF · Two-thirds rule (published 20 August 2026): revenue.ie
Revenue — RCT for subcontractors (0% / 20% / 35%, published 19 May 2026): revenue.ie · Tax and Duty Manual 18-02-01 (gross payment is the VAT-exclusive amount where the reverse charge applies, February 2026): PDF
This calculator shows the arithmetic of the published rates; it is not tax advice. For your own situation ask an accountant.
