What is the two thirds rule ?

The two thirds rule applies to a transaction which at first sight appears to be the

supply of a service may nevertheless be taxed as a supply of goods if the value

of the goods supplied in carrying out the work exceeds two-thirds of the total

charge. Therefore, instead of 13.5% applying 23% applies to the whole transactions

There is a concession which allows separate invoicing of materials and labour.

Where the “two thirds rule” is breached the supplier may get to invoice the

materials and labour separately thus alleviating the impact of the provision i.e.

where the labour qualifies for the reduced rate then only the materials will

bear the higher rate.

Any queries on the two thirds rule give me a call on 091 763817 or email me on oliver@taxreturnhelp.ie