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Recent updates from Irish Revenue and EU Commission

ITM Newsletter July 2022

Revenue eBrief No. 027/22 - 09 February 2022

Guidelines for Registration for IT, CT, RCT, PREM and Certain Minor Taxheads

The Tax and Duty Manual Part 38-01-03a - Guidelines for Registration for IT, CT, RCT, PREM and Certain Minor Tax heads - was updated to outline the registration process for Betting Duty.

Betting Duty is an excise duty charged on all bets placed by a person with a Licensed Bookmaker or a Licensed Remote Bookmaker, irrespective of how the bet is placed.

Resident Bookmakers

Resident bookmakers should apply directly to the National Excise Licence Office (NELO) for a Bookmaker’s Licence. Applicants must submit the Bookmaker’s Licence Application form and attach their Certificate(s) of Personal Fitness in support of same to the address as listed at the end of the application form.

Once the application has been processed, NELO will issue the customer with a First Time Application Notice. This notice invites the customer to complete their application and pay for their licence.

NELO will process the application for the Bookmaker’s Licence and check tax clearance through an automated process at the point of payment before the licence issues.

Once the Bookmaker’s Licence issues, NELO will advise Business Division Registration Unit (BDREG Unit) accordingly. Upon receipt of such confirmation BDREG Unit will register the licenced bookmaker for BET Tax.

Where an application for BET Tax registration is received directly in BDREG Unit from a resident bookmaker, BDREG Unit will advise NELO of same and will not register the applicant for BET Tax until NELO has confirmed that a Bookmaker’s Licence has issued to the applicant.

Non-Resident Bookmakers

Non-resident traders who are providing Remote Betting Services to persons in the State and are not registered for tax in Ireland must apply to be registered for Betting Duty/Betting Intermediary Duty by completing Form TR (BET).

Revenue eBrief No. 031/22 - 11 February 2022

New Code of Practice for Revenue Compliance Interventions

Revenue published its new Code of Practice for Revenue Compliance Interventions which came into effect on May 1 2022 and applies to all compliance interventions notified on or after that date.

This Code sets out details of Revenue's revised framework of compliance interventions. Revenues intention is that this framework will provide a consistent, graduated response to taxpayer compliance behaviour ranging from easily accessible opportunities to voluntarily correct errors, up to, criminal investigation for serious cases of fraud or evasion.

The existing Code of Practice for Revenue Audits and other Compliance Interventions continues to apply to all interventions already opened or notified prior to 1 May 2022.

Revenue eBrief No. 043/22 - 25 February 2022

VAT Treatment of Staff Secondments

Tax and Duty Manual VAT Treatment of Staff Secondments has been updated with regard to the VAT treatment of Staff Secondments.

A sentence has been added to the end of Section 2 “Revenue’s concessionary treatment of certain secondments”. The sentence notes that the concession does not apply where PAYE, PRSI (employer and/or employee) and/or USC liabilities do not arise because of the secondment.

Revenue eBrief No. 045/22 - 25 February 2022

Section 56 zero-rating of goods and services

The VAT Tax and Duty Manual has been updated with regard to Section 56 zero-rating of goods and services, particularly regarding (i) qualifying persons, (ii) imports, and (iii) the cancellation of authorisations.

The Manual confirms that for renewals of existing valid authorisations, the turnover from audited financial statements for an accounting year-end that falls within the 12 months preceding the application may be used.

The Manual notes a qualifying person is an accountable person whose turnover from zero-rated intra-Community supplies of goods, export of goods outside the EU and supplies of certain contract work amounts to 75% or more of their total annual turnover for the 12 months preceding the making of an application for authorisation under these provisions. Revenue has clarified that it will accept that where an accountable person in a start-up situation does not meet the 12-month trading requirement, that person may, in the circumstances in paragraph 1.1, apply to Revenue for authorisation for the zero-rating facility on an interim basis until such time as the 12-month requirement has been met.

Revenue eBrief No. 046/22 - 25 February 2022

VAT Groups

The Revenue manual on VAT Groups has been updated regarding the effective date of VAT Group Applications with amendments made to Section 3 and Section 5.1 of the manual.

Persons that wish to form or join a VAT group must apply to Revenue using the prescribed application forms. The person applying to be the remitter of a VAT group should complete and submit a Form VAT 52. The other person(s) applying to be members of the VAT group should complete and submit a Form VAT 53.

If Revenue approves the VAT group application, it will take effect from a date specified by Revenue. In the event that Revenue refuse an application to form or join a VAT group this may be appealed to the Tax Appeal Commission.

Revenue also has the power to compulsorily VAT-group persons where Revenue determines that all the conditions for a VAT group to exist have been met. In cases where this power is exercised, the VAT group will come into existence from a date specified by Revenue. The compulsory registration, by Revenue, of a group of persons as a VAT group may also be appealed to the Tax Appeal Commission.

Revenue eBrief No. 052/22 - 02 March 2022

Manual on EU Sanctions in Response to the Situation in Ukraine

A new Tax and Duty Manual - Manual on EU Sanctions in response to the situation in Ukraine - has been published. It provides an overview of the import and export prohibitions and restrictions that have been introduced.

This Manual was created by Revenue to reflect an overview of the measures adopted, legislative references, and as guidance for Customs staff. It also to includes the following:

  • Guidance on additional measures in respect of Russia and Belarus.
  • Updated legislative references.
  • Updated import/export control instructions.

Revenue eBrief No. 062/22 - 14 March 2022

Update of Budget 2022 Excise Duty Rates

New rates of Mineral Oil Tax (MOT) for 1 May 2022

The Revenue manual on Excise Duty Rates on Energy Products and Electricity has been updated to reflect changes in rates of Mineral Oil Tax (MOT) on certain mineral oils which came into effect from 10 March 2022.

The manual also provides details of further changes to MOT rates, effective from 1 April 2022 and 1 May 2022, as well as changes to Solid Fuel Carbon Tax and Natural Gas Carbon Tax effective from 1 May 2022.

Additionally, the Budget - Excise Duty Rates manual has also been updated to reflect the above rate changes.

Revenue eBrief No. 067/22 - 21 March 2022

Customs Import Procedures Manual

The Customs Import Procedures Manual has been amended to include two new paragraphs: Paragraph 8.4 – Detention of Goods and Paragraph 8.5 – Partially Detained Goods.

In addition, the following paragraphs have been amended:

  • Paragraph 4.3 - Form of Report and Particulars Required: updated for clarity and to remove reference to a nil G3/G4 declaration.

  • Paragraph 4.13 – Imports of Third Country Excisable Goods into a Tax Warehouse: updated to reflect the requirement to submit an Advance Notification and Receipt Notification of Import of Duty Suspended Excisable Goods to Revenue.

  • Paragraph 7.6 – Destruction of Goods: updated to provide clarity.
  • Paragraph 8.6 – Overtime Goods: moved to accommodate new paragraphs listed above

Revenue eBrief No. 080/22 - 01 April 2022

New Rates of Mineral Oil Tax for 1 April 2022

Revenue confirmed a further decrease in Mineral Oil Tax (MOT) rates arising from a change in the non-carbon component of MOT in respect of petrol and auto-diesel that took effect from 1 April 2022. This decrease also applies to aviation gasoline, to heavy oil used for aviation and for private pleasure navigation and to substitute fuels used as propellants. The rates can be found in the Excise Duty Rates on Energy Products and Electricity Tax and Duty Manual.

Revenue eBrief No. 095/22 - 27 April 2022

Taxation of crypto-asset transactions

Part 02-01-03 Taxation of crypto-asset transactions - has been updated to provide Revenue’s view of the tax treatment of transactions involving crypto-assets, it includes some worked examples.

In line with the CJEU decision in the Hedqvist case, Revenue have deleted the reference to Bitcoin and similar instruments being negotiable instruments – i.e., this sentence has been deleted ‘It is Revenue’s view that Bitcoin and similar cryptocurrencies are regarded for VAT purposes as ‘negotiable instruments’ and exempt from VAT in accordance with Paragraph 6(1)(c) of the VAT Consolidation Act 2010.

Note that the Hedqvist case specifically states that Bitcoin is not a security or a negotiable instrument.

As such, the change to the guidance potentially narrows the VAT exemption in Ireland.

Updates from the European Commission ‘Commission’

December 2021 infringements package – 2 December 2021

It had been decided that the Commission would send reasoned opinion as follows:

  • Cyprus: Two reasoned opinions are to be sent to Cyprus for failure to notify the measures for the transposition into national law of EU directives 2017/2455 and 2019/1995 (the “VAT e-commerce” directives). The new rules are intended to simplify VAT for companies and consumers involved in cross-border online sales within the EU and to create a fairer environment for EU sellers by removing the VAT exemption for low-value imports from outside the EU. Member states should have adopted and published the necessary national provisions by 30 June 2021.
  • Germany: In respect of the failure to fulfil its obligation to grant other member states automated access to the information concerning call-off stock arrangements via the electronic system VIES (VAT Information Exchange System). The IT system requirements for call-off stock arrangements are intended to allow member states to exchange more easily electronic data with each other with a view to fighting fraud. Call-off stock arrangements are one of the VAT simplifications referred to as “quick fixes” that entered into force on 1 January 2020 and require, amongst others, that member states adapt their IT systems to allow for the exchange of information between member states as required by Council Regulation 904/2010. The lack of the necessary adaptations by Germany makes it more difficult for other Member States to carry out the controls necessary to prevent VAT fraud or tax evasion.
    The following infringement proceedings were closed:

  • France: Incorrect application of the VAT directive to Corsican wines.

  • Germany: VAT exemption for 10 kilometre-zone passenger transport and VAT refunds to taxable persons not established in Germany.

  • Hungary: Incompatibility of the Electronic Control System for Road Freight Transport (EKAER) with the EU principal VAT directive and the EU Charter of Fundamental Rights; and

  • UK: VAT treatment in the Isle of Man of acquisitions, leasing, and leasing for purchase of aircraft.

https://ec.europa.eu/commission/presscorner/detail/en/inf_21_620

State aid: Commission approves €18 million Irish scheme to support the road haulage sector in the context of Russia's invasion of Ukraine – 27 April 2022

The Commission has approved an €18 million scheme in Ireland to support the road haulage sector in the context of Russia's invasion of Ukraine. The scheme was approved under the State aid Temporary Crisis Framework, adopted by the Commission on 23 March 2022, based on Article 107(3)(b) of the Treaty on the Functioning of the European Union (‘TFEU'), recognising that the EU economy is experiencing a serious disturbance.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2669

EU-UK relations: European Union ensures continued supply of medicines to Northern Ireland, as well as Cyprus, Ireland, and Malta – 12 April 2022

The Commission welcomed the swift adoption by the Council of the proposals to ensure the continued long-term supply of medicines from Great Britain to Northern Ireland and to address outstanding supply concerns in Cyprus, Ireland, and Malta – markets that have been historically supplied through or by Great Britain.

For Cyprus, Ireland and Malta, the rules endorsed by the European Parliament and the Council provide a temporary derogation so that they can continue to source medicines from the United Kingdom only if needed. The Directive and Regulation apply retroactively from 1 January 2022 and 31 January 2022 respectively. It is expected that within three years, until 31 December 2024, these markets will gradually phase out the temporary derogations and decrease the dependency of their domestic markets on the supply with medicinal products from or through parts of the United Kingdom other than Northern Ireland.

In addition, at the end of 2022, the Commission will make proposals to revise the EU's pharmaceutical legislation. These proposals will seek to provide longer-term structural solutions to the issue of access to medicines, with special attention to enhancing security of supply and addressing risks of shortages in the smaller markets of the Union.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2385

Stand Up for Ukraine: €9.1 billion pledged in support of internally displaced and refugees – 9 April 2022

The “Stand Up for Ukraine” global pledging event and campaign has raised €9.1 billion for people fleeing the Russian invasion, inside Ukraine and abroad, including €1 billion from the European Commission. On top of that, the European Bank for Reconstruction and Development has announced an additional €1 billion in loan to cover the needs of the people displaced by the invasion.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2382

Energy Security: Commission hosts first meeting of EU Energy Purchase Platform to secure supply of gas, LNG, and hydrogen – 8 April 2022

In order to secure the EU's energy supply at affordable prices in the current geopolitical context and to phase out dependency on Russian gas, the Commission has established with the Member States an EU Platform for the common purchase of gas, LNG, and hydrogen. A first virtual meeting, chaired by Director General for Energy, Ditte Juul Jørgensen, was held yesterday, with representatives of the 27 Member States.

As agreed by the Heads of State and Government in the European Council on 25 March, it will be a voluntary coordination mechanism, bringing together the Commission and the Member States, supporting the purchase of gas and hydrogen for the Union, by making optimal use of the collective political and market weight of the EU.

The Platform will help ensuring security of supply, in particular for the refilling of gas storage facilities in time for next winter, in line with the Commission's proposal presented on 23 March. It will also see to an optimal use of existing gas infrastructure. In addition, it will enhance long-term cooperation with key supply partners, extending also to hydrogen and renewables, possibly through Memoranda of Understanding.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2387

Ukraine: EU agrees fifth package of restrictive measures against Russia – 8 April 2022

The Commission welcomed the agreement by the Council to adopt a fifth package of restrictive measures against Putin's regime in response to its brutal aggression against Ukraine and its people. Together with the four previous packages, these sanctions will further contribute to ramping up economic pressure on the Kremlin and cripple its ability to finance its invasion of Ukraine. These measures are broader and sharper, so that they cut even deeper into the Russian economy. They have been coordinated with international partners.

The Commission and the EEAS are working on additional proposals for possible sanctions, including on oil imports, and are reflecting on some of the ideas presented by Member States, such as taxes or specific payments channels, such as an escrow account. Beyond sanctions, the EU has made it clear that reducing our dependence on energy imports from Russia is an urgent imperative. The Commission announced in its REPower Communication of 8 March a strategy to reduce dependence on Russian fossil fuels as soon as possible and work has started to implement this plan.

Further details on this package and previous packages can be found using the following link:

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2382

Commission awards over €1 billion to innovative projects for the EU climate transition – 1 April 2022

The Commission signed grant agreements of €1.1 billion with seven large-scale projects via the EU Innovation Fund, funded by revenues from the EU's Emissions Trading System (ETS). These projects aim to reduce emissions by over 76 Mt of CO2eq during the first ten years of operation. The seven projects are deploying innovative low-carbon technologies at industrial scale, covering key sectors such as hydrogen, steel, chemicals, cement, solar energy, biofuels, and carbon capture and storage.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_2163

Brexit Adjustment Reserve: Commission approves €2 billion of pre-financing for 12 Member States – 14 March 2022

The Commission has approved the disbursement of more than €2 billion under the Brexit Adjustment Reserve to a group of 12 Member States. This decision will make available a total of €819.2 million by the end of March 2022 and the rest by April 2023. This funding will help the economies of the Member States in mitigating the adverse impact of Brexit on their economies and regions, through support to regions and economic sectors, small and medium sized companies as well as job creation and protection, such as short-time work schemes, re-skilling, and training.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1669

EU budget: Commission publishes guidance on the conditionality mechanism – 2 March 2022

The Commission adopted its guidelines on the general regime of conditionality, which aims to protect the EU budget against breaches of the principles of the rule of law. The guidelines explain in detail how the Commission will apply the regulation, including how the rights of the final recipients and beneficiaries of EU funding will be protected.

https://ec.europa.eu/commission/presscorner/detail/en/ip_22_1468

Press statement by President von der Leyen on Russia's aggression against Ukraine – 24 February 2022

Early this morning, Russian troops invaded Ukraine, a free and sovereign country. Once again, in the centre of Europe, innocent women, men and children are dying or fear for their lives. We condemn this barbaric attack, and the cynical arguments to justify it.

It is President Putin, who is bringing war back to Europe. In these dark hours, the European Union and its people stand by Ukraine and its people. We are facing an unprecedented act of aggression by the Russian leadership against a sovereign, independent country. Russia's target is not only Donbas or Ukraine, but the stability in Europe and the whole of the international peace order. And we will hold President Putin accountable for that.

Later today, we will present a package of massive and targeted sanctions, to European Leaders for approval. With this package, we will target strategic sectors of the Russian economy by blocking their access to technologies and markets that are key for Russia. We will weaken Russia's economic base and its capacity to modernise. And in addition, we will freeze Russian assets in the European Union and stop the access of Russian banks to European financial markets. Like with the first package of sanctions, we are closely aligned with our partners and allies – the United States, the United Kingdom, Canada, but also, for example, Japan and Australia. These sanctions are designed to take a heavy toll on the Kremlin's interests and their ability to finance war.

And we know that millions of Russians do not want war. President Putin is trying to turn back the clock to the times of the Russian empire. But in doing so, he is putting at risk the future of the Russian people. I call on Russia to immediately stop the violence and to withdraw its troops from Ukraine's territory. We will not let President Putin tear down the security architecture that has given Europe peace and stability over many decades. We will not allow President Putin to replace the rule of law by the rule of force and ruthlessness. He should not underestimate the resolve and strength of our democracies.

History has proven that societies and alliances built on trust and freedom are resilient and successful. And that is exactly what the autocrats fear. The European Union stands with Ukraine and its people. We will continue to support them. Ukraine will prevail.

https://ec.europa.eu/commission/presscorner/detail/en/statement_22_1322

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