Our view on recent updates from Irish Revenue and EU Commission

Indirect Tax Matters November 2020

Irish Revenue Updates – Nov 2020

Temporary reduction in the standard rate of VAT:

As part of the July 2020 Stimulus Package, the Minister announced the introduction of a temporary reduction in the standard VAT rate from 23% to 21% with the new lower rate to remain in place for six months from 1 September 2020 until 28 February 2021.

Revenue eBrief No. 143/20 - 30 July 2020

Using on-line methods to make a payment to Revenue:

The Tax and Duty Manual Using on-line methods to make a payment to Revenue has been amended and restructured to improve readability.

There are now 7 payment types on MyAccount (previously there were 5). In addition, there is a new Appendix which explains a ROS Debit Instruction (RDI) and a Single Debit Instruction (SDI). We hope these changes will be of benefit to all ROS customers.

Revenue eBrief No. 159/20 - 21 August 2020

Customs Import Procedures Manual:

The Customs Import Procedures Manual has been updated to highlight the forthcoming changes due to the introduction of the new Automated Import System (AIS).

Revenue eBrief No. 170/20 - 11 September 2020

Customs Export Procedures Manual:

The Customs Export Procedure Manual has also been updated to reflect changes in the Union Customs Code (UCC) No 952/2013 and to provide information on export procedures for staff.

This includes the new definition of 'exporter' which provides for greater flexibility in choosing the person who may act as exporter for customs purposes.

Also mentioned is the fact that the UK ceased to be a member of the EU on 31st January 2020 but there will be no change to the treatment of UK goods during the transition period due to finish on 31st December 2020.

Amendments have been made to reflect changes in terminology under the UCC. For example, transit sheds and container compounds are now referred to as temporary storage facilities.

Revenue eBrief No. 172/20 - 14 September 2020

Customs Import Procedures:

The Customs Import Procedures Tax and Duty Manual has been updated to reflect the AIS (Automated Import System) go live date of 2 November 2020.

eCustoms Helpdesk released note 023/2020 on 27th October to advise the go live date was postponed until 23rd November, in order to have the most efficient switchover to the new system as Revenue recognised that some importing businesses still faced some ‘challenges’ to be operational in time.

Revenue eBrief No. 175/20 - 21 September 2020

VRT Online Payments in ROS and MyAccount:

A new Tax and Duty Manual (TDM) VRT Online Payments in ROS and MyAccount has been created to give guidance on a new online payment facility for VRT that has been made available on ROS and My Account. This allows customers with an existing VRT registration to make VRT payments via ROS or MyAccount. Where a customer is not registered for VRT and wishes to make a VRT payment, the customer is automatically registered for VRT. An agent who is linked to a customer will also be able to make VRT payments on their behalf via ROS.

Online payments can be made via Debit card, Credit card, or Single Debit Instruction (customer instruction to Revenue to deduct the payment from a nominated bank account). We hope that this will assist in streamlining VRT payments.

Revenue eBrief No. 180/20 - 01 October 2020

Extension of deadline to avail of a 3% reduced rate of interest on outstanding 'non-Covid-19' tax debts:

A welcome decision by Revenue to extend the deadline to avail of a 3% reduced rate of interest on outstanding “non-Covid-19” debts until 31st October 2020.

The July Jobs Stimulus Package had initially included this incentive once a payment arrangement was agreed between a taxpayer and Revenue by 30 September 2020.

Given the uptake of this measure to date, and recognising the challenges that taxpayers and tax agents are experiencing at this time, Revenue has announced a one month extension to the initiative. Taxpayers, or tax agents acting on their behalf, had until 31 October 2020 to finalise phased payment arrangements covering non-Covid tax debts in respect of liabilities due by 30 September.

Revenue eBrief No. 183/20 - 07 October 2020

Update to Guidelines for VAT Registration:

The Tax and Duty Manual (TDM) Guidelines for VAT Registration has been updated to reflect system changes and to improve readability and brings with it increased functionality such as options to upload documents as part of the e-reg process. In our view, there are no substantive changes to the registration process for taxpayers or agents.

Revenue eBrief No. 184/20 - 07 October 2020

Cancellation of Tax Registration:

This manual which outlines the process for cancelling tax registrations where requests have been received in electronic or paper form has been updated to reflect system changes, to improve readability, and to incorporate content previously included in appendices to Guidelines for Registration of Taxpayers. The manual covers registrations for Income Tax, Corporation Tax, Employer PAYE/PRSI (PREM), Environmental Levy (eLevy), Value Added Tax (VAT), Customs & Excise (C&E), and Relevant Contracts Tax (RCT), and some minor tax heads.

Revenue confirms Debt Warehousing Scheme remains available to support businesses impacted by Level 3 restrictions - Revenue Press release, 13 October 2020:

No doubt a welcome decision by Revenue in confirming that the Debt Warehousing Scheme remains available to support businesses experiencing cashflow or trading difficulties arising from COVID-19 related public health restrictions, including the most recent restrictions announced by Government.

To summarise, this scheme allows businesses to ‘park’ PAYE (Employer) and VAT debts arising from the COVID-19 crisis. Currently, almost 70,000 businesses are availing of the scheme to the value of €2.1 billion. Following changes in the public health measures recently announced, Revenue has confirmed that this vital liquidity support remains available.

The terms of the scheme remain the same in that access is automatic for SMEs (businesses managed by Revenue’s Business Division) and on request for larger businesses (managed by Revenue’s Medium Enterprise Division (MED) and Large Corporates Division (LCD)). It also remains a requirement that the business continues to file all relevant tax returns for the restricted trading period(s) so that the tax debt can be included in the warehousing scheme.

Revenue eBrief No. 186/20 - 14 October 2020

VAT Treatment of Education and Vocational Training:

The guidance has been updated to include additional information regarding the provision of education or training services by a provider in receipt of Exchequer funds. It also includes a new paragraph in relation to the place of supply rules for lecturing services received from abroad.

Irish based training providers should be aware that if the place of supply for lecturing services received from abroad is the State (in accordance with B2B rules), these services are liable to VAT, if the services are not “closely related” to education. The Irish-based training provider is liable to account for the VAT on the reverse charge basis in relation to such taxable services.

Revenue eBrief No. 191/20 - 20 October 2020

Vehicle Registration Tax Manual

The VRT Manual Section 1 has been re-structured to improve ease of access for customers and Revenue staff.

Revenue eBrief No. 196/20 - 29 October 2020

Temporary VAT measures relating to Covid-19

Other news we welcome is that the concessional VAT treatment of specific medical products and donations or gifts of goods and meals has been extended to 30 April 2021, subject to review.

Revenue eBrief No. 197/20 - 30 October 2020

Budget 2021 – Changes to the Value Added Tax rates on the supply of certain goods and services:

The VAT Tax and Duty Manual has been updated to reflect the application of the second reduced VAT rate (9%) to the supply of certain goods and services, from 1 November 2020 until 31 December 2021. This was announced as part of Budget 2021.

This is no doubt very welcome news for many businesses given the 9% rate will apply during the above dates to the supply of restaurant and catering services, guest and holiday accommodation and entertainment services such as admissions to cinemas, theatres, museums, fairgrounds and amusement parks.

It will also apply to hairdressing and the sale of certain printed matter such as brochures, maps and programmes. The 9% rate already applying to magazines and newspapers and to the provision of sporting facilities will remain unaffected.

Revenue eBrief No. 199/20 - 30 October 2020

Customs Manual on Import VAT:

The Customs Manual on Import VAT has been amended to incorporate changes arising from the introduction of the new Automated Import System (AIS) launching on 23 November 2020.

EU Commission updates

Proposal to adapt VAT rules to apply the reduced rate or an exemption to Covid-19 testing kits and to grant the zero-rate for Covid-19 vaccines

In a communication to the European Parliament and European Council the Commission have stated that:

One step taken was to support the market by reducing the burden of customs duties and value added tax (VAT). The Commission authorised requests from Member States to suspend temporarily customs duties and VAT on the import of medical equipment from non-EU countries. It defined an indicative list of goods, such as personal protective equipment, testing kits, ventilators and key medicines. This will now be extended to April 2021.

There is also room to further adapt the VAT framework to ensure that COVID-19 vaccines and tests become more affordable for health services and citizens. The Commission is therefore proposing to temporarily adapt the rules to apply a reduced rate or exemptions of VAT in respect of COVID-19 testing kits, and to allow Member States to grant a zero rate in respect of COVID-19 vaccines.

See pg. 8:

The VAT Gap – €140 billion in tax revenues lost in 2018 with more losses expected in 2020 due to coronavirus 

The “VAT Gap” – the difference between expected and actual revenues in EU Member States has reduced in the last few years however, over €140 billion was lost in 2018.

Romania recorded the highest national VAT Gap with 33.8% of VAT revenues going missing in 2018, followed by Greece (30.1%) and Lithuania (25.9%). The smallest gaps were in Sweden (0.7%), Croatia (3.5%), and Finland (3.6%).

EU updates list of non-cooperative tax jurisdictions

Anguilla and Barbados have been added to the list maintained of non-cooperative tax jurisdictions by the Council. The Cayman Islands and Oman have been removed from the list.

There are currently 12 jurisdictions on the list: American Samoa, Anguilla, Barbados, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands and Vanuatu.

Commission approves €2 billion Irish loan guarantee scheme for companies affected by the Covid-19

The European Commission has approved an Irish loan guarantee scheme to support companies affected by the coronavirus outbreak. The scheme was approved under the State aid Temporary Framework.

The aid consists of direct grants, equity injections, selective tax advantages, state guarantees for private company loans, subsidies, public loans to private companies, wage subsidies and support for coronavirus testing.

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