Guides for Irish trades

RCT invoicing for subcontractors

How Relevant Contracts Tax works when you do construction work for a principal contractor, what the deduction rates mean, and what changes on your invoice.

General information, not tax advice. Tax rules change and your situation may differ. Always check with your accountant or financial adviser before you change how you invoice or charge VAT. Last checked against Revenue's website on 6 November 2026.

What RCT is

When you do construction work as a subcontractor for a principal contractor, the principal contractor deducts tax from your payment and pays it to Revenue. This is Relevant Contracts Tax (RCT). The rate depends on your tax record with Revenue:

0% if your tax affairs are up to date;
20% if they are substantially up to date;
35% if they are not, or if you are not registered with Revenue.

Revenue sets your rate and reviews it regularly. Keeping your returns and payments up to date keeps the deduction low.

VAT on RCT work: the reverse charge

For construction services you supply to a principal contractor, you do not charge VAT. The principal contractor accounts for it instead. Your invoice shows no VAT rate and no VAT amount, and carries a note that the VAT is to be accounted for by the principal contractor.

One commonly used wording is "VAT on this supply to be accounted for by the Principal Contractor". Revenue's general invoice page does not set wording for construction services, so ask your accountant or financial adviser which wording to use.

Work you do directly for a homeowner is not RCT work. You charge VAT in the normal way if you are registered. See our VAT guide for trades.

Keeping track

FixOpsFast records each job, the materials and hours used, and what you have been paid, so the figures are ready when your accountant asks for them.

Need an invoice now? Use our free invoice and quote template. It works with or without VAT, and you can print it or save it as a PDF without signing up.

Sources

Questions

Do I charge VAT to a principal contractor?

For construction services supplied to a principal contractor under RCT, no. The principal contractor accounts for the VAT under the reverse charge, and your invoice shows no VAT. Check the wording with your accountant or financial adviser.

What are the RCT rates?

0% if your tax affairs are up to date, 20% if they are substantially up to date, and 35% if they are not or you are not registered with Revenue. Revenue sets and reviews your rate.

Ready to get back on the tools?

A 20-minute, no-pressure chat about whether FixOpsFast suits your business.

Book a 20-minute chat