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