Is Vending Machine Profit Taxable?

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A lot of people are currently taking an interest in investing in a vending machine. The main reason is the promise of a sizable vending machine profit. It is true that vending can be a highly lucrative business. But there are also several costs to consider. One of these, which many neglect in the initial computations, is the taxes. In this article, we are going to clarify the common concerns that new vending operators like you have about taxes.

Is Vending Machine Profit Taxable?

Different VAT Rates for Vending Machine Items

The thing about taxes in Ireland is that there are different rates that apply to different types of products. It might seem confusing in the beginning. However, it’s easy to obtain a copy of the list so you can just refer to it anytime you need.

To start with, a lot of basic food and drink products are chargeable to zero-rate VAT. This category includes bread, milk, meat, vegetables, and similar essentials. These are rarely available in vending machines but just in case, they will no longer be at zero-rate. Once they sell through a vending machine, they become chargeable to a reduced rate VAT.

The second category of food items is bakery products that are either egg-based or flour-based. Examples of these are biscuits, wafers, crackers, and cakes. These items are liable to reduced-rate VAT, regardless of whether consumers buy them from a vending machine or at a traditional store.

Finally, most beverages and some foods are chargeable to standard VAT when sold through a vending machine or otherwise. Alcoholic beverages, soft drinks, fruit juices, and even bottled water fall into this category. Freshly squeezed natural juice drinks are also in this class as well.

How Much Tax Do You Have to Pay on Vending Machine Profit?

The VAT rates might change from time to time so you will want to check the current rates. The standard VAT rate in Ireland has been at 23% since last year. This means all standard rate items come with a 23% VAT, which is already included in the purchase cost.

As for reduced VAT rates, the value is currently at 13.5%. As mentioned earlier, this includes most bakery products like cakes and biscuits. These items actually account for many of the food items that are usually available through vending machines.

Now, if you have zero-rated goods that you decide to sell through your vending machine, these are chargeable to VAT at the reduced rate as well, which is 23%.

Maximizing Vending Machine Profit

We have already clarified that vending machine profit is indeed taxable. Naturally, you will want to maximize this vending machine profit so that there will be more left for you. It doesn’t make sense to operate a business to just have all the profits go into taxes.

So to maximize your revenue, you basically need to sell the right products at the right location. It’s not always easy, which is why you also need a reliable partner who will have your back throughout the entire process. That is what is here for. From providing you with the finest vending machines Ireland has ever seen, all the way to helping you with restocking, repairs, and even taxation concerns, we are right here. Call us to learn more – we will be happy to schedule you for a free consultation!

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