There are two different methods of returning VATto the revenue :

• Sales invoice basis
• Cash receipts basis 

The method of return which you apply is indicated in your VAT registration certificate and is decided by the revenue. An application to change may be made directly to the revenue. You may only change the method applied once confirmed by the revenue. The difference between both methods relates only to how VAT on Sales is returned to Revenue.

Sales Invoice Basis

Under the Sales Invoice Basis, VAT becomes payable to the Revenue once a sale is made/ sales invoice raised irrespective of whether or not settlement of the invoice has been received.

Cash Receipt Basis

Under the Cash Receipts Basis, VAT only becomes payable upon receipt of cash in the settlement of a sale. If a sales invoice has been made you need not pay the VAT to the Revenue until you receive settlement of the invoice. Upon settlement, the VAT becomes payable on the amount received.