Our view on recent updates from Irish Revenue and EU Commission
Guidelines for VAT registration (Revenue eBrief No. 82/17)
The updated Revenue guidance for VAT registration emphasises that for the application of VAT registrations, it is vital for Revenue to perform relevant appraisal assessments with respect to the risk involved.
The Guidance focuses on putting the Revenue electronic system into use and provides that with rare exceptions, applications for VAT registrations should now be made online through eRegistration and supplementary documents supporting such application or cancellation of VAT registration could be subsequently provided by the business or its agents through the MyEnquiries section online.
The Guidance also reiterated that for VAT registrations that took effect after June 2012, with rare exceptions, it is mandatory for businesses to file VAT returns and discharge VAT liabilities (if any) online using the Revenue electronic platform (ROS).
The Deloitte Indirect tax team has extensive experience securing successful VAT registrations for clients as well as assisting on the preparation and filing of VAT returns to ensure compliant tax records for clients. For any queries in relation to VAT registration or VAT compliance and ensuring you meet your VAT requirements, please contact Alan Kilmartin.
Enhancements to the VAT 3 filing process in ROS (Revenue eBrief No. 085/17)
The VAT 3 online filing process in Revenue Online Service (ROS) has recently been enhanced to introduce two new functions comprising an optional facility for users to provide basic details of unusual expenditure incurred and a mandatory Confirmation Screen that summarises the payable/repayable balance of an online VAT 3 prior to submission in order to minimise the risk of filing an incorrect return.
The provision of additional information is optional and will enable users, when completing a VAT return online, to provide Revenue with brief descriptions of unusual or exceptional expenditure items that would otherwise be likely to result in verification checks, such as VAT Aspect Queries, Revenue Audits or VAT Compliance Interventions being made by Revenue.
The mandatory Confirmation Screen that presents users with a summary of the payable/repayable balance of an online VAT 3 has been added to the ‘Sign and submit’ step prior to the submission of a VAT return online. The intention of this function is to minimise the risk and the negative consequences of filing incorrect VAT returns. Completion of this confirmation process prior to submission of the VAT return is mandatory.
The Deloitte Indirect tax team has significant experience dealing with Revenue Audits, VAT Compliance Interventions and VAT Aspect Queries raised by Revenue. If you require any assistance on this topic please contact Alan Kilmartin or Jim Nolan.
VAT and Payment Services (Revenue eBrief No. 100/17)
The new Revenue guidance on VAT and Payment Services provides the guiding principles in relation to the VAT treatment of transactions concerning the transfer of money, in particular the negotiation of or dealing in payments and transfers.
The guidance sets out that, when considering whether a service qualifies for exemption of VAT in accordance with paragraph 6(1)(c) of Schedule 1 to the VATCA, the general principle is that transactions are defined based on the purposes and nature of the services provided, rather than the nature of the person supplying or receiving the services. The guidance provides definitions of what constitutes the ‘transfer of money’ and details to be considered when determining whether the VAT exemption applies. The key feature of an exempt transaction is that the service provider must be responsible for bringing about a change in the legal and financial relationships between the parties making the payment. The guidance points out that just because a supply is vital for an exempt transaction to occur does not mean that the supply concerned is VAT exempt. The guidance points to computer and other facilitating infrastructure which though critical to making electronic payments are not themselves the provision of VAT exempt services.
The guidance further provides clarifications on the VAT treatment of payment services from various perspectives including the status of the supplier, means by which the service is supplied, physical or technical services, composite and multiple supplies, evolving nature of the services, etc.
The Deloitte Indirect tax team has comprehensive knowledge on the VAT treatment of various financial services. If you require any assistance on this topic please contact Ciara McMullin or Richard McDaid.
Single VAT Area proposed by European Commission
The European Commission has recently launched long-term plans for a big reform of EU VAT rules and proposed a series of fundamental principles with the aim to achieve a modernised new EU VAT system. The enhanced system is also designed to simplify the EU Single Market and to reduce the VAT lost in government revenue due to cross-border VAT fraud, which can be used to finance criminal and terrorist activities.
The proposals include a series of fundamental principles, or 'cornerstones' of a new definitive single EU VAT regime. It also introduces a new concept of a Certified Taxable Person and four 'Quick Fixes' to come into force by 2019.
The proposals will be forwarded to the European Parliament and the European Economic and Social Committee for consultation, to the Council for agreement, and finally to all Member States in the Council for unanimous agreement before they can enter into force.
Currently the next planned steps for November 2017 include proposals for a modernised system of VAT rates that gives Member States greater flexibility as regards setting VAT rates, proposals to reinforce administrative cooperation between Member States, enabling Member States to share information in a more efficient fashion and to cooperate more and proposals to simplify VAT for SMEs by updating special VAT rules for smaller companies.
Further plans also include the full technical adaptation of the VAT directive to reflect the changes needed to practically implement the definitive VAT regime as proposed by the Commission by Spring 2018 and entry into force of the Single EU VAT area by 2022.
The Deloitte Indirect tax team has considerable expertise on the EU VAT rules and up-to-date knowledge on latest changes in EU VAT legislations. If you require any assistance on this topic please contact Donal Kennedy, Alan Kilmartin or Richard McDaid.