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The latest update from our VAT team
Our updates page will be updated with the latest news and developments in VAT.
VAT on Cross Border Sales
The VAT treatment of sales of goods cross border can be notoriously complex. In February the Court of Justice of the EU issued a judgment dealing with such sales. The case concerned the sale of petroleum products by BP to Bidi Ltd which undertook to transfer the products from Germany to Austria. Without notifying BP Bidi Ltd sold the goods to Kreuzmayr Gmbh while the goods were still in Germany and the goods were transferred from Germany to Austria. BP initially treated the sales as a 0% intra Community supply and Bidi Ltd charged Kreuzmayr Austrian VAT which it claimed back in its VAT return. This reclaim was disallowed by the Austrian Revenue which was upheld by the Court.
The Court held that the sale by BIDI to Kreuzmayr, and not the initial sale by BP, was the 0% rated Intra-Community supply. This was on the basis that the second sale, i.e. the sale by BIBI, took place before the goods moved from Germany. A copy of the judgment of the court is available here.
Revenue have issued an e-Brief outlining their policy that all rulings issued by Revenue are valid for to a maximum period of 5 years, or such shorter period as may have been specified by Revenue when providing the ruling. A taxpayer or tax practitioner who wishes to continue to rely on an opinion issued more than 5 years ago must
- supply evidence of the ruling, being a copy of a written communication which originated from Revenue, and
- lodge a full application for the renewal or extension of the ruling with the Revenue District dealing with the taxpayer’s affairs by 30 June 2017.
This eBrief is available here.
EU consultation on reduced VAT rates for e-books
The European Commission has launched a consultation on the application of reduced VAT rates to supplies of electronic publications which can be found here.
Under current EU law, electronic publications are subject to the standard rate of VAT, while printed matter can be taxed at lower rates (and are zero-rated in some countries). As part of its Action Plan on VAT, the Commission undertook to bring forward a legislative proposal to allow Member States to align the VAT treatment of paper and electronic publications. This consultation (which is based on a questionnaire) seeks views on the potential effects of a change to allow lower rates of VAT to apply to electronic publications.
How to Protect your Business from Becoming Involved in VAT fraud
Revenue have issued an e-Brief outlining the risks of participating in transactions connected to a VAT fraud and providing guidelines to help avoid becoming involved in such transactions. This eBrief is available through the following link.
Management of Special Investment Funds
Revenue have stated their position following the recent CJEU decision in respect of the "management of special investment funds" and the VAT treatment of management services supplied in relation to Self-Directed Life Assurance Bonds and equivalent products. This eBrief is available here.
Recent enhancements to VAT Return of Trading Details (RTD) in ROS
VAT RTD functionality in ROS was limited relative to that available for other returnS. As part of the ongoing redevelopment of the VAT RTD by Revenue, a package of enhancements to further integrate RTD functionality in ROS was implemented in April 2016. This development does not change any of the existing arrangements for processing RTDs, but provides enhancements to the user experience in ROS. Revenue have issued an eBrief outlining these enhancements which is available here.
Cancellation of a registration number – special provisions for notification and publication
The VAT Consolidation Act 2010 (VATCA) was amended by Finance Act 2015 to include a new section, section 108D. This section provides that where a VAT registration number is cancelled, the Revenue Commissioners may, where it appears necessary to do so, advise the suppliers to the business to whom the cancelled number relates, of the cancellation. They may also publish certain particulars of the cancelled registration number in Iris Oifigiúil and in other publications or media. An eBrief which outlines the implications of this new anti-fraud measure is available here.
Revenue has increased its focus on compliance risks in the Construction Sector and will be paying particular attention to how the VAT reverse charge is being operated. Penalties will be applied where appropriate. Revenue has issued an e brief which can be accessed here.
Commencement of new tax and duty appeals process
The new Tax Appeals Commission (TAC) was established on 21 March 2016. From that date, all appeals (with the exception of customs duty appeals and "first-stage" VRT appeals) have to be made directly to the TAC and not through Revenue. Revenue have issued an eBrief regarding the Commencement of the new appeals process – available here.
Revenue e-Brief – VAT on eServices Scheme (VOES) / Electronic Services Scheme (ESS)
Revenue have issued an e-Brief on the new scheme, the Mini One Stop Shop (MOSS), which came into operation on 1 January 2015 and replaced the VAT on eServices Scheme (VOES), or Electronic Services Scheme (ESS) as it was also known. This eBrief is available here.
Revenue’s VAT Notes for Guidance for Finance Act 2015
The Revenue Commissioners have recently published a note for guidance
for Inspectors on the Finance Act 2015. This document is available here.
VAT treatment of portfolio management services
As required by the judgment of the Court of Justice of the EU in the
case of Deutsche Bank Revenue have confirmed that portfolio management
services are liable to VAT. Previously Revenue had generally treated
the service as VAT exempt. In certain circumstances it is still possible
to get the benefit of VAT exemption for a specific element of the
services. Revenue have also confirmed that they do not propose to
pursue businesses that, based on Revenue practice, had regarded the
services as VAT exempt. The Revenue publication is available here
Recovery of VAT on pension fund costs
Irish Revenue have confirmed that subject to certain conditions
businesses are entitled to recover VAT on expenses related to the
management of pension funds. Previously, this was not the case.
Also, there is potential for a business to reclaim VAT incurred on
those costs historically subject to a four-year time limit.
The Revenue publication in relation to this issue is available here.
Following a judgment of the Court of Justice of the European Union,
Revenue accept that green fees charged by member-owned clubs to
non-members should be treated as exempt from VAT.
The Revenue publication in relation to this issue is available here.
The VAT treatment of supply of research services by educational bodies
is subject to VAT, but only in certain circumstances. Revenue have
clarified those circumstances; see the Revenue publication here.
Revenue eBrief - VAT return of trader details – Introduction of automated compliance measures
Irish Revenue have recently published an eBrief on the VAT Return of Trader Details (VAT RTD) filing requirement and its interaction with refund claims. This eBrief is available through the following link.
Revenue updated VAT Leaflet – Transfer of business
Irish Revenue have recently published an updated leaflet in relation to transfer of business relief (TOB). This updated leaflet is available through the following link.
Revenue eBrief – Adjustment of VAT deductible where consideration is unpaid after 6 months (section 62A)
Finance (No. 2) Act 2013 introduced a provision to claw-back input VAT deducted on purchases where a supplier is not paid within 6 months of the taxable period. The initial VAT period for which this claw-back can apply is the January/February 2014 VAT period. Supplies for that period which are not paid for by 31 August could therefore give rise to an adjustment of input VAT in the July/August 2014 VAT return.
Irish Revenue have recently published an eBrief in relation to this and this is available through the following link.
Revenue e-Brief – VAT treatment of independent film and TV productions
Irish Revenue have recently issued an e-Brief on the VAT treatment of the commissioning of independent film and TV productions. This eBrief is available through the following link.
Revenue e-Brief – How to protect your business from becoming involved in VAT fraud
Irish Revenue have recently published guidance on how to protect a business from becoming involved in VAT fraud. It includes some practical tips on checks to carry out when entering into a business transaction with a new party. It also looks at the principle set out in ECJ case law whether a taxpayer 'knew or ought to have known' they were party to a fraudulent transaction and how this will be applied by Revenue.
This eBrief is available through the following link.
Revenue eBrief - VAT - Supply of a fully managed service comprising of the hire and laundry of linen in the healthcare sector
Irish Revenue have recently published an eBrief outlining the VAT treatment of the supply of a fully managed service comprising of the hire and laundry of linen in the healthcare sector. This eBrief is available through the following link
Revenue eBrief – Travel Agent’s Margin Scheme
Irish Revenue have recently published an eBrief outlining their position regarding the Travel Agent’s Margin Scheme following the recent decisions of the CJEU. This eBrief is available through the following link
VAT Mini One Stop Shop presentation
Irish Revenue have recently issued guidance in relation to the implementation of VAT Mini One Stop Shop and this is available through the following link
CJEU – discount cards not exempt from VAT
The CJEU recently delivered its judgment in the case of Granton Advertising BV where they held that the sale of “discount cards” was no an exempt supply under the Sixth Directive. The full case judgment can be found through the following link
Margin Scheme – Second-Hand Goods Leaflet
Irish Revenue have recently published an updated leaflet, Margin Scheme - Second-Hand Goods (including Second-hand Means of Transport and Agricultural Machinery). The leaflet is available through the following link.
OECD’s Framework on Applying Cross Border VAT
The governments of eighty-six countries at a recent Global Forum on VAT meeting endorsed a new set of OECD guidelines for applying national VAT rules to cross-border transactions. According to the OECD, these guidelines seek to address the problems that arise from national VAT systems being applied in an uncoordinated way in the context of international trade. They set standards aimed at ensuring VAT neutrality and making taxes on B2B trade in services destination-based. Further details can be found through the following link.
Bad debt relief - CJEU confirms that EU law provision has 'direct effect'
The CJEU recently delivered its judgment in a Hungarian case, Almos Agrárkülkereskedelmi Kft. regarding a claim for bad debt relief. In this case, a company delivered rape seed to its customer, who did not pay for it or return it. The Hungarian tax authority were of the view that as the company had been unable to recover the seed, there had been a supply of it on which VAT was due. On this basis the tax authority refused to allow the VAT adjustment claimed by the company. The CJEU decided that Article 90 of the VAT Directive (which sets out a range of circumstances in which VAT declarations should be adjusted) had “direct effect” and could therefore be relied upon by taxpayers facing contrary national provisions, which could impose only limited restrictions on taxpayers’ rights to adjust VAT declarations where there was total or partial non-payment. The case can be found through the following link.
European Commission explanatory notes for 2015 place of supply changes
As highlighted in the January 2014 VAT Updates, the VAT rules surrounding the place of supply of certain services such as electronically supplied services to private individuals in the EU, will change from January 2015. The European Commission have recently issued explanatory notes to help businesses to prepare for the new VAT rules. These notes are available through the following link.
These notes should be read together with the Commission’s guide to the VAT One Stop Shop.
New Mixed Supplies of Goods and Services Leaflet
Irish Revenue have recently published an updated Mixed Supplies of Goods & Services Leaflet. The leaflet is available through the following link.
Printing and Printed Matter VAT Leaflet
Irish Revenue have recently published an updated Printing & Printed Matter VAT Leaflet. The leaflet is available through the following link.
New VIES and INTRASTAT Traders Manual
Irish Revenue have recently published an updated VIES and INTRASTAT Traders Manual, which replaces the November 2011 issue. The manual is available from the Revenue's website here.
Proposed EU VAT Return
The European Parliament has endorsed the European Commission’s plans to introduce a standard VAT return for businesses across all EU Member States. The proposal is that an EU VAT Return will replace national VAT returns in an endeavour to standardise information and standardise filing deadlines across the EU.
Management of Defined Contribution Pension Funds should be VAT exempt – CJEU judgment
The ECJ case ATP Pension Service A/S examined the VAT treatment of the management of defined contribution pension schemes (“DC schemes”). This is the fourth case in a series of recent significant pension fund related decisions of the CJEU. Please find our analysis summarising all four of the pension related cases and detailing the action points through the following link.
ROS Digital Certificate Expiry Notice
Irish Revenue have published an e-Brief in relation to ROS Digital Certificates. ROS Certificates issued by Revenue normally have a two-year validity, after which time they require renewal in order to retain access to ROS. Revenue updated the ROS Certificate Authority on 13th January 2014 and all certificates issued by the old authority will now expire on 27th March 2014. ROS users will be presented with the certificate renewal screen when they login to ROS and should renew their certificate at this time to ensure continued access to ROS. Further details are available from Revenue's website here.
Return of trading details 2013
As highlighted in our January 2014 VAT updates, a simplified VAT RTD template was implemented on November 29th 2013. It is important to ensure that all companies file the VAT RTD as not doing so can have significant implications, such as triggering Revenue audits, delays in issuing VAT refunds and delays in issuing tax clearance certificates. Further details on the simplified VAT RTD are available from Revenue through the following link.
VAT rates around the EU
The EU Commission recently published the latest schedule of VAT rates for each of the 28 EU Member States. The schedule also provides information on the application of reduced VAT rates and provides an overview of historical VAT rates in each Member State. The schedule is available through the following link.
Irish Revenue confirm VAT exemption on certain green fees
Irish Revenue have published an e-Brief which sets out their position following the recent ECJ judgment in Bridport and West Dorset Golf Club Limited, which we covered in our January 2014 VAT updates. As a consequence of this decision Revenue accepts that green fees charged by non-profit clubs to non-members should be treated as exempt from VAT. Previously Revenue treated green fees for non-members as VATable. Further details are available from Revenue through the following link.
VAT payments through ROS
A recent e-Brief from Revenue confirms that from 1 February 2014 taxpayers may make tax payments through ROS from bank accounts located in one of the SEPA participating countries. SEPA is a European Union initiative that is changing the way euro electronic payments are processed across participating SEPA countries. Previously payments could only be made from an Irish bank account. Further details are available from Revenue through the following link.
Telecommunications, broadcasting and electronically supplied services to consumers - 2015 significant changes
The VAT rules surrounding the place of supply of certain services such as electronically supplied services to private individuals based in the EU, will change from 1 January 2015. Find out more about this change here or visit our dedicated webpage.
Intrastat return change
For January 2014 and all subsequent Intrastat declarations the “Mode of Transport” field will become a mandatory item and so must be completed on all (both arrivals and dispatches) returns.
ECJ ruling in favour of VAT exemption on golf club green fees
A recent ECJ case Bridport and West Dorset Golf Club Limited examined whether green fees charged by private golf clubs to non-members qualify for VAT exemption under European law. The Court decided that the VAT exemption applies to all supplies of the facility to play golf provided by non-profit clubs regardless of whether the supply is provided to a member of the club or to a non-member. Previously Revenue treated green fees for non-members as VATable. Contact a member of the VAT team for more information on a possible reclaim of overpaid VAT.
Return of trading details 2013
For VAT registered businesses with a 31 December year end, the VAT Return of Trading Details for 2013 is due by 23rd January 2014. The Annual VAT RTD must be completed through ROS. On November 29th 2013, a simplified VAT RTD template was implemented. Further details are available from Revenue through the following link.
Disallowance of input VAT
Finance Act (No 2) 2013 has introduced new rules providing that where businesses have not paid for supplies (in full or part) within a six month period they will be required to repay the VAT claimed on those supplies. Therefore, if the full consideration on an invoice issued after 1 January 2014 is not paid within 6 months following the VAT period in which the invoice issued, the business should reduce the amount of its input VAT. However, if there is a reasonable basis for not paying the full consideration If may be possible to avoid having to make the adjustment. Where the business makes the adjustment and subsequently pays the supplier the consideration it can then increase its input VAT accordingly. Contact a member of the VAT team for more information.