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Our view on recent updates from Irish Revenue and EU Commission

Indirect Tax Matters February 2021

Irish Revenue Updates – Nov 2020

Revenue eBrief No. 201/20 - 09 November 2020

Guidelines for Agents or Advisors Acting on Behalf of Taxpayers

Tax and Duty Manual - Guidelines for agents or advisors acting on behalf of taxpayers has been updated to reflect changes to the use of the term “TAIN” and to provide further guidance on administrative practice.

The use of a TAIN allows tax agents and other advisors access to ROS, to file returns, make payments and submit enquiries on behalf of clients. While the TAIN has historically been understood as meaning a “Tax Agent Identification Number” it has a second meaning as a “Transaction Advisory Identification Number”. This is in recognition of:

  • the role of solicitors as intermediaries in processing “transactional” taxes for clients, and
  • the need for solicitors to have access to, and use, the “TAIN” functionality in ROS for CAT online services and the eCG50.

Tax agents and advisors/intermediaries can use a TAIN both for a client’s entire tax obligations and/or for any transactional tax obligations for which the agent or advisor may be representing the client.

Revenue eBrief No. 206/20 - 16 November 2020

VAT Treatment of the Hiring of Means of Transport

The guidance in the Tax and Duty Manual on the VAT Treatment of the Hiring of Means of Transport has been updated to include additional information on the short term hire of passenger vehicles.

A passenger vehicle means a vehicle designed and constructed, or adapted, for the conveyance of persons by road. It is important to note that vehicles designed and constructed, or adapted, for the carriage of goods by road, with or without passenger capacity, are not considered to be a passenger vehicle for the purposes of the application of the reduced rate of VAT to a short-term hire.

The hire of a goods vehicle is subject to the standard rate (currently 21% but to revert back to 23% from 1 March 2021) of VAT.

Revenue eBrief No. 207/20 - 19 November 2020

Import Duties Payment Methods

The Tax and Duty Manual AEP System Payment Methods has been renamed to "Import Duties Payment Methods".

This guide which should be of benefit to traders impacted by Brexit outlines the options available to traders for the payment of Customs Duty, VAT at the point of import, Excise and VRT on imports through Revenue’s Automated Import System (AIS).

Deferred Payment

A deferred payment authorisation allows traders to defer payment of duties and taxes. In all instance’s lodgement of a guarantee and compliance with the conditions of the authorisation is required. The authorisation allows the approved trader to pay the duties/taxes due by direct debit on a date in the month following the transactions.

The guide also states that excise traders operating from a warehouse must have a deferred payment facility in place.

Revenue eBrief No. 208/20 - 20 November 2020

VAT eCommerce Rules - 1 July 2021

New VAT eCommerce rules that will come into effect from 1 July 2021. These amendments will significantly change the way VAT operates for cross-border business-to-consumer (B2C) e-commerce activities in the EU.

The main changes that will enter into force from 1 July 2021 are as follows:

  • Extension of the VAT Mini One Stop Shop (MOSS) to a One Stop Shop (OSS)
  • The treatment of Online Marketplaces and Platforms as deemed suppliers for certain transactions
  • Introduction of a new Import One Stop Shop (IOSS)
  • Introduction of Special Arrangements for certain imports of goods.on 1 July 2021.

Revenue eBrief No. 227/20 - 17 December 2020

VAT Treatment of Guest and Holiday Accommodation

The Manuals on the VAT treatment of Emergency Accommodation and Ancillary Services, Letting of immovable goods and Cancellation of a holiday home election have been updated to reflect new guidance issued in relation to guest and holiday accommodation.

The provision of guest or holiday accommodation involves the active exploitation of property. It typically involves some additional service element which distinguishes it from the letting of property. This may include, for example, housekeeping, dining or reception services.

A supply of guest or holiday accommodation, irrespective of the duration of the supply, is taxable at the second reduced rate (9%) of VAT.

Revenue eBrief No. 230/20 - 21 December 2020

VAT - Postponed Accounting

A new Tax and Duty Manual – VAT - Postponed Accounting - has been published. This contains information on the procedures, conditions and operation of Postponed Accounting by accountable persons who import goods into the State from third countries. This is a welcome cash flow benefit to traders.

Postponed Accounting arrangements enable an accountable person to self-account for VAT on imports on their VAT return so that import VAT may, subject to the usual rules on deductibility, be reclaimed at the same time as it is declared on a VAT return. This will be a straightforward reverse charge transaction, without the need to pay the import VAT at the point of importation. In other words, it will be recorded in the VAT return as VAT which is simultaneously deducted on a ‘purchase’ and charged on a ‘sale’ in a similar way to the manner in which intra-community acquisitions are currently recorded on the return.

Also worth noting is that the VAT 3 and VAT Return of Trading Details (RTD) have been amended to include additional fields /boxes to capture the value of goods imported under Postponed Accounting.

Revenue eBrief No. 231/20 - 21 December 2020

The following new Tax and Duty Manuals have been published to outline the VAT treatment effective on enactment of Finance Act 2020: (to include some VAT rate changes):

Restaurant and Catering Services

Restaurant services are liable to VAT at the second reduced rate. However, it is worth noting that supplies of alcohol, bottled waters, soft drinks, sports drinks and vegetable juices (excluding fruit juices) are liable to VAT at the standard rate even when provided as part of a restaurant service.

Certain Sanitary Products

The zero rate of VAT applies to the supply of

  • sanitary towels (including maternity pads)
  • panty liners and
  • sanitary tampons.

With effect from 1 January 2021, the reduced rate of VAT applies to the supply of

  • menstrual cups
  • menstrual pants and
  • menstrual sponges.

Prior to 1 January 2021, the above supplies were taxable at the standard rate.

All other sanitary products are taxable at the standard rate. This includes:

  • adult incontinence pads
  • other feminine hygiene products.

Services relating to Vessels and Aircraft

All supplies of services that meet the direct needs of qualifying vessels and aircraft or their cargoes are liable to the zero rate of VAT. This includes the supply of such services by an intermediary.

Admission to Amusement Parks and Fair Grounds

The second reduced rate of VAT applies to admissions to

  • amusement parks and
  • fair grounds.

However, this excludes any part of the fee for such admission which relates to goods or services other than such admission.

With effect from 1 January 2021 the standard rate of VAT applies to

  • amusement services supplied within amusement parks if a separate or additional charge is made for them and
  • to amusement services in other settings, for example, a child’s ride in a shopping centre.

Revenue eBrief No. 237/20 - 23 December 2020

Guidelines for VAT Registration - with Postponed Accounting

This manual outlines the process for approval of VAT Registration applications received through either the Revenue Online Services/e-Registration channel or the paper registration (TR) form.

The manual has been updated to include procedures relating to Postponed Accounting, and to reflect the release of a VAT Number Verification facility for domestic-only Irish VAT registrations.

Revenue eBrief No. 241/20 - 24 December 2020

Collection of Customs Debt

Another topical update to reflect the changes when entering codes for direct and indirect representation to import declarations in the new AIS system.

This Manual explains the procedures to be followed in relation to the collection of customs debts where outstanding import duties (i.e. customs debts) are identified post clearance.

Revenue has robust checking procedures in place in order to satisfy EU obligations and ensure compliance with the requirements of the Customs Code and its associated Implementing Provisions.

Revenue eBrief No. 242/20 - 24 December 2020

Customs Procedures - Manuals update

The following manuals have been updated to incorporate changes arising from Brexit and the end of the transitional period on 31 December 2020:

  • Baggage Control Examination Manual
  • Customs Import Procedures Manual
  • Customs Export Procedures Manual.

Revenue eBrief No. 244/20 - 31 December 2020

Section 56 Zero-rating of Goods and Services

Tax and Duty manual - Section 56 Zero-rating of Goods and Services - has been updated to reflect legislative changes to Section 56 of the Value-Added Tax Consolidation Act 2010, arising from the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020, which came into effect on 1 January 2021.

It should be noted that there is now a requirement for all applicants who apply for authorisation under Section 56A to have a tax clearance certificate.

Revenue provides important Customs advice to hauliers and truck drivers moving goods from Great Britain (GB) into Irish ports - 5/1/2021

No doubt some welcome important advice to hauliers and truck drivers moving goods to, from or through, Great Britain (GB) into Ireland by ferry in relation to the following:

  • creating a correct Pre-Boarding Notification (PBN)
  • the importance of checking the hauliers customs channel prior to disembarking.

Following Revenue’s advice will help ensure that vehicles carrying goods to and from GB should be able to board their scheduled ferry without any difficulties and will mean truck drivers can present goods for customs controls, if any, on arrival with the minimum of delay.

Creating a correct Pre-Boarding Notification

Those responsible for transporting goods to or from Great Britain by ferry are required to create a Pre-Boarding Notification (PBN) on the Customs RoRo Service before the goods start their journey, and in advance of vehicles moving to the departure port.

Revenue continues to support trade and business in adapting to the new customs formalities arising from the UK’s departure from the EU. In this regard, a detailed step by step guide on how to create and correctly populate a PBN is available on www.revenue.ie. Revenue has also set up a dedicated email support service to deal with all PBN related queries at customsPBN@revenue.ie.

Additionally, Revenue put a temporary arrangement in place that allowed for the creation of a PBN for goods movements that began before the end of the transition period (31 December) and ended after that date. This temporary arrangement was facilitated by allowing whoever was creating the PBN for a goods movement into Ireland to select an option of ‘Other’. This has ensured the continued movement of goods as 1 January approached by providing the necessary details required to board the ferry.

As the overlap period for such goods movements has now passed, Revenue confirmed this temporary arrangement will no longer be available for all sailings departing GB on or after 18:00 hours on 5 January 2021.

Customs Channel Look Up

Drivers travelling on ferries from Great Britain to Ireland are reminded to check their customs channel on the Customs RoRo Service 30 minutes out from arriving into Dublin or Rosslare ports. The customs channel will not be available before that as Revenue’s risk analysis process will be running while the ship is travelling between GB and Ireland.

The Customs RoRo Service provides a range of trade facilitation services that minimise delays, in so far as possible, for goods coming into, and moving out of, Irish ports and involving Great Britain. The Channel Look-up service enables truck drivers to check if their vehicle can ‘Exit the Port’ or is required to ‘Call to Customs’ on arrival.

Revenue reminded truck drivers of two key things to keep in mind to ensure they can access their customs channel:

  1. Have the Pre-Boarding Notification Identification number (PBN ID) for the vehicle or trailer
  2. Check the customs channel no earlier than 30 minutes prior to disembarking.

Revenue confirms Debt Warehousing Scheme remains available to support businesses impacted by current Level 5 restrictions - 13 January 2021

Welcome news as Revenue confirmed that the Debt Warehousing Scheme remains available to support businesses experiencing tax payment difficulties arising from the current COVID-19 Level 5 public health restrictions, which were to remain in place until at least 31 January 2021.

To recap, the Debt Warehousing Scheme allows businesses to ‘park’ PAYE (Employer) and VAT tax debts arising from the COVID-19 crisis, as well as self-assessed income tax amounts (balance of 2019 Income Tax liability and 2020 preliminary tax) and Temporary Wage Subsidy Scheme overpayments.

These debts can be ‘parked’ on an interest free basis for 12 months following resumption of trading. At the end of the 12-month interest free period, the warehoused debt may be paid in full without incurring an interest charge or paid through a phased payment arrangement at a significantly reduced interest rate of 3% per annum. This compares to the standard rate of 10% per annum that would otherwise apply to such debts.

Currently, approximately 70,000 businesses are availing of the scheme covering €1.9 billion in tax debt. Following the move to Level 5 restrictions, Revenue confirmed that this vital liquidity support remained available, and businesses which have had to close can continue to warehouse current VAT and PAYE (Employer) liabilities.

The Government announced on 26th January and extension to the current level 5 restrictions to at least 5th March, Revenue have not issued any further guidance since their press release on 13th January.

Revenue eBrief No. 007/21 - 21 January 2021

eRCT system - re-opening a closed contract

Revenue guidance on the Electronic Relevant Contracts Tax (eRCT) system is updated to include additional screens and guidance on how to re-open a closed contract (where required if a delayed payment is being notified).

Revenue eBrief No. 005/21 - 18 January 2021

Customs Charges for Official Attendance

Tax and Duty Manual Customs Charges for Official Attendance has been updated to reflect that no charges for official attendance by Customs officers will apply pending a review in July 2021.

Revenue eBrief No. 009/21 - 26 January 2021

Accounting for Mineral Oil

The Accounting for Mineral Oil Manual has been updated to include information regarding deferment of Mineral Oil Tax and the security guarantee required to avail of the deferred payment.

Guidance has also been included in relation to making of an assessment of Excise Duty by authorised officers.

Revenue eBrief No. 010/21 - 26 January 2021

Temporary VAT measures relating to Covid-19

The guidance note Temporary VAT Measures Relating to Covid-19 has been updated to include the VAT treatment applicable to the supply of covid-19 vaccines and testing kits.

Services are treated as closely linked to the supply of Covid-19 vaccines and Covid-19 testing kits only where they are directly linked and necessary for the supply of those vaccines and testing kits.

Revenue eBrief No. 016/21 - 29 January 2021

Guidelines for conducting Compliance Interventions remotely during COVID-19

Another relevant update includes guidelines for conducting Revenue Interventions remotely during Covid-19. This provides guidance to case workers when conducting compliance interventions during the Covid-19 Pandemic. The guidance includes:

  • Initiating notifications via MyEnquiries
  • Conducting virtual interviews
  • Engaging with taxpayers and practitioners.

Revenue eBrief No. 018/21 - Valuation System for New and Used Vehicles - 4 February 2021

Valuation System for New and Used Vehicles

VRT Manual Section 8 – Valuation System for New and Used Vehicles – This manual which describes the method used by Revenue to determine the Open Market Selling Price (OMSP) of the various makes, models and versions of vehicles on presentation for registration has been updated to reflect changes introduced in Finance 2020.

A number of sections have been updated to include calculations on both the CO2 (carbon dioxide) element and the NOx (nitrogen dioxide) element.

EU Commission updates

Questions & Answers: EU – UK Trade and Cooperation Agreement - 24th December

The Commission released an article in which it discussed the implications of the UK Trade and Cooperation Agreement. This outlined how the agreement will affect the future VAT treatment of goods entering Northern Ireland from Great Britain. In order to avoid a hard border in Ireland, the provisions of the Trade and Cooperation Agreement will not govern trade in goods between the EU and Northern Ireland where the Protocol on Ireland and Northern Ireland will apply. As a result of the protocol, goods entering Northern Ireland from Great Britain will constitute imports. This means that such goods will need to comply with EU product rules and be subject to checks for safety, health and other public policy purposes.

https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_2532

Questions & Answers: Joint Committee formally adopts a set of implementation measures related to the EU-UK Withdrawal Agreement - 17th December

The Commission released an article, which in part discusses the VAT implications resulting from the Protocol on Ireland and Northern Ireland. The article discusses how imports from Great Britain to the EU will be subject to the applicable VAT rates in each member state. Goods being exported to Great Britain will generally be exempt from VAT though companies must be able to prove that the goods have left the EU. This proof will generally be in the form of a certification of exit given to the exporter by the customs office of export. A company established in Great Britain carrying out taxable transactions in a Member State of the EU may be required by that Member State to designate a tax representative as the person liable for payment of the VAT in accordance with the EU VAT rules.

https://ec.europa.eu/commission/presscorner/detail/en/qanda_20_2472

Coronavirus response: Commission welcomes agreement on crucial VAT relief for vaccines and testing kits - 7th December

On the 7th of December, The Commission adopted new measures which would enable Member states to relieve individuals of VAT when acquiring coronavirus vaccines and testing kits. The measures would allow EU countries to put in place a temporary VAT exemption for vaccines and testing kits being sold to hospitals, doctors and individuals, as well as closely related services. Previously, Member States could apply reduced VAT rates on sales of vaccines but could not apply a zero rate, while testing kits cannot benefit from reduced rates. Under the amended Directive, Member States would be able to apply either reduced or zero rates to both vaccines and testing kits if they so choose. These measures were adopted with the aim of providing a better and cheaper access to tools needed to prevent, detect and treat COVID-19.

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2299

Brexit: The Commission proposes the creation of a Brexit Adjustment Reserve – 25th December

The Commission put forward a proposal for a Brexit Adjustment Reserve to help counter any adverse economic effects at the end of the transition period on 31 December 2020 in the Member States and sectors that are the worst affected. The reserve would have an overall budget of €5 billion and would aim to support businesses and employment in affected sectors as well as assist public administrations for the proper functioning of border and customs controls.

https://ec.europa.eu/commission/presscorner/detail/en/ip_20_2536

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