educating supporting representing module 7 – value added tax chartered tax stage 2 30 th & 31...

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www.charteredaccountants.ie

Module 7 – Value Added Tax Chartered Tax Stage 2

30th & 31st March 2012

Chartered Accountants House

Objectives & Background

• Research Materials (including legislation)• Importance of VAT• The EU perspective• Core legislation• Revenue• Compliance obligations• Accounting for VAT

Research Materials

• Irish Legislation VATCA 2010• Sections 1-125 (plus Schedules)• Useful commentary e.g. Section 5 –

(case-law, precedents, publications...)

• Regulations – (SI 639/2010)

Research Materials

• EU Directives– Council Directive 2006/112/EC– Other directives

• Information Leaflets (NOT LAW)

Importance of VAT

• Impacts on all businesses• Based on transactions, NOT profits• Large part of tax-take• Potentially high-risk

Transactions

• Identify the issue– What is being supplied?– Who is supplying it?– Where is supplier located?– Where is recipient located?– What is the VAT treatment and who must

account for VAT?

The EU Perspective

• Common VAT System• Ireland - 1972• 2006 Recast Directive (2006/11/EC)• EU law can be relied on (by taxpayer

only)......but....

The EU Perspective

• Derogations- property- transportation, sports fixtures• Some elements may be optional or give

Member States latitude (e.g. gambling exemption)

- "shall" V "may" in the text

The EU Perspective

• Who is in the EU (for VAT purposes)?

- Norway? Switzerland? Turkey?

- Cyprus? Malta? Slovenia?

• European Court of Justice (ECJ)

- decisions generally binding

Examples of ECJ Influence

• Toll roads (EU action)• Canteens• Retained deposits• Local authorities (EU action)

Anti Avoidance Case Law - ECJ

• Halifax; Bupa and Huddersfield Cases• Held jointly – anti avoidance and abuse of

law• Structures put in place to enable Vat

recovery

Anti Avoidance Case Law - ECJ• ECJ held that arrangements constituted

“economic activities”• A transaction could be an “abusive

practice”• Contrary to EU Directive• Sec 811 TCA 1997• Consider domestic and EU principles in

VAT planning

Irish Legislation

• VAT Consolidation Act 2010• Finance Act 2011• Regulations

- SI 639 of 2010 most relevant

Interpretation

• Section 2 VATCA 2010 – includes important definitions such as:

- "business"- "development" (property transactions)- "taxable person"- "goods"

VATCA 2010

Section 2 Definitions

Section 3 Charge to VAT

Section 4-13 Accountable Persons

Sections 19-21 Supply of Goods

Section 25-28 Supply of Services

Section 29-35 Place of Supply of Goods & Services

Section 36-45 Amounts on which VAT arises

Section 46-52 Rates of VAT and Vat Exemption

VATCA 2010Section 59-62 Deduction for VAT

Section 63-65 Deduction for VAT on immovable goods

Section 65-85 Administration, invoices, VAT Returns, Revenue powers

Sections 86-92 Special Schemes e.g. farmers, travel agents

Section 93-98 Immovable Goods

Section 99-125 Refunds and Repayments

Schedules VAT Rates

VATCA 2010 - SchedulesSchedules to VATCA 2010 – VAT Rates

Schedule 1Exempt

•Financial services; Healthcare; Education

Schedule 2Zero Rate

•Basic Foods; Oral Medicines; Exports; Printed Books

Schedule 3Reduced Rate

•13.5% - Property Sales; Gas & Electricity/Fuels; Construction services; Maintenance work•9% - Tourism related until 2014•Hotel accommodation, restaurant & catering; Cinema/theatre; hairdressing; newspapers; sporting facilities

The charge to VAT

• Section 3 VATCA 2010- applies to sales and imports/acquisitions- Intra Community acquisitions

- note – "import" V "acquisition"

- special rule for 'new' means of transport

The charge to VAT

• New means of transport =

- cars < 6 months old or- < 6,000km on the 'clock‘

• Boats/aircraft – different values

The charge to VAT

• Example: Joe lives in Dublin and he is looking at 4 different cars in Newry, as follows:

A – 5,000km & 9 months old

B – 7,000km & 4 months old

C – 6,500km & 8 months old

D – 0km & brand new

The charge to VAT

• Irish VAT due if Joe purchases?:

A – Yes – only 5,000km

B – Yes – only 4 months old

C – N0 - 6,500km & 8 months old

D – Yes - 0km & brand new

Note – VRT still due on registration.....

The basic charging conditions

• Supply of 'goods' or 'services'- Vital to know the difference- VAT treatment can be very different (e.g.

self-supply of goods v self-supply of services)

- place of supply etc.


• Supply for consideration- is it linked to the supply?- e.g. Government grant to buy machine –

taxable?- donation to street performer – taxable?- €1m euro court award for defamation -

taxable?


• In the State – 26 Counties

- Northern Ireland is in UK for VAT purposes

- International waters are outside the State


• By a taxable person (carrying on a business = economic activity)

• Acting as such...- e.g. Joe sells his private car for €100k –

taxable?

- Peter is a car dealer and sells a car for €10k – taxable?

The supply of goods

• Section 19 VATCA 2010- transfer of ownership by agreement- agents (see next slide)- CPOs (usually land)- self-supplies (see slide)- liquidators / receivers

The supply of goods

• Agents- 'disclosed agent' – buyer knows agent is a

'middle man'- undisclosed – buyer believes agent owns

the goods- different VAT treatments

The supply of goods

• Self-supplies- divert to 'private' use – e.g. retailer

consumes stock- divert to 'exempt' use – e.g. move

equipment from estate agency business to mortgage broker business (exempt)

• gifts - €20 limit – or industrial samples

The supply of goods

• Deemed non-supplies- hire-purchase agreements – initial

handover is VAT event, not legal transfer at end

- security in financial arrangements – e.g. title deeds transferred under mortgage and handed back by bank at end

The supply of goods

• Deemed non-supplies- 'transfer of business' assets – see slide- insurance company disposal if insured

had no recovery – e.g. where goods acquired as part of settlement claim

Transfer of business relief

• Sections 20(2)(c) and 26 VATCA 2010– (Previously Sections 3(5)(b)(iii) & 5(8))

• Revenue leaflet• Share sale V Asset sale• Is it a 'business'?• Consider Revenue approval• VAT recovery on costs

Transfer of Business Relief

• Conditions–Purchaser is VAT Registered and–Transfer constitutes an independent

undertaking–Does not have to be a going concern

Transfer of business relief

• Recovery of VAT on Professional Fees• E.g. Joe sells business for €25m• Professional fees = €1.5m, VAT = €315k• Joe sells shares, no recovery• Company sells assets, full recovery

– Sec 59(2)(m) VATCA 2010

• Other tax and commercial considerations

Goods – place of supply

• Section 3 VATCA 2010- where transportation begins (if required)- where located (if no transportation)- where installed (if supply and install)- place of departure (on planes/boats/trains

within EU

Goods – place of supply

• Distance Sales – Section 30 VATCA 2010• Mail Order to non registered individuals• Supplies of goods to individuals• Each country has own threshold• Can elect to register in other country

before reaching threshold – any advantage?

Place of supply - examples

• French Co sells goods to US Co – goods remain in UK all the time

• French Co sells goods to US Co – and delivers them from UK to US

• Ryanair sells item on flight from Dublin to Brussels

• Irl Co sells goods to UK customer and delivers goods from Irl to UK premises

Place of supply - examples

• Irl Co sells goods to US Co and delivers goods to US

• NB – if goods are despatched from Ireland, then place of supply is Ireland – may be zero-rated but place of supply is Ireland

International Rules - GoodsSupply Place of Supply

Goods sold within Ireland Sec 29(1) (c)VATCA 10Ireland

Goods sold and despatched from Ireland to EU VAT registered customerIntra Community Supply

Schedule 2 VATCA 10Zero RateVAT no of customer quotedReserve VAT charge noted

Goods sold and despatched from Ireland to EU VAT non registered customer

Irish VAT if below thresholdSales> threshold * distance salesRegister in other EU country*€35,000/€100,000


Goods to customer outside EU

Sch 2 VATCA 10Zero Rate

Goods acquired from EU country

Self account – Irish VATRecovery where entitlementBox E2 VAT Return> €191,000 Intrastat

Exempt Taxable Person acquisition of good from EU> €41,000 in 12 monthsLocal Authorities etc

Obliged to register for VatSelf account on reverse chargeVAT recovery?


Intra Community acquisition of New Means of Transport from EU country

Irish VAT at standard rateSec 2 VATCA 10

Imports from outside EU VAT at point of entryObtain SADDeferral SchemeDirect debit – guarantee lodged

Triangulation

• Simplification measure- 3 parties in 3 different EU countries- A sells to B who in turn sells to C- Goods delivered from A to C- No need for B to register in C's country- B must state on invoice that Triangulation

applies

Triangulation

A EU State 1

B EU State 2 C EU State 3

Sale @ 0%

Sale @ 0%

VAT on Property

• Introduction to Key Concepts and Rules• Revenue VAT and Property Guide• Section 63-64 and 93-98 VATCA 2010• Sec 2 VATCA 2010

– “Immovable Goods”– Land & Buildings– Place of Supply Rules– Property located in the State

• Tax errors can be very costly

VAT on Property

• "Development" – see Section 2 VATCA 10- construction, alteration, reconstruction,

extension, demolition of buildings- other operation which materially alters the

use of the land

- important concept – if no development, then usually no VAT

VAT on Property

• 'Old rules' – pre 1 July 2008• 'New rules' – post 1 July 2008• 'Transitional rules'

- need to know old all three....

VAT on Property

• The 'old system' – pre 1 July 2008- interest in property of 10 years or more

was a supply of goods (freehold, leasehold, options included)

- interest in property less than 10 years was a service – known as a 'short lease‘

- VAT @ 13.5%

VAT on property ('old rules')

• VAT on supply of property if:- supply of ten years or more...and...- developed since 1972...and...- vendor had VAT recovery...and...- supply in course of business...and...- EVT satisfied (if lease)- Section 4 VATA 1972


• Section 4(5) VATA 1972 – 'connected development'

- anti-avoidance measure

• Long leases (10 or more years)- VAT upfront – 'capitalised value'- VAT 4A procedure- VAT @ 13.5%


• Short leases- less than ten years- exempt from VAT- could 'waive exemption'- applied to all short lettings- FA 2007 – exception for certain residential

properties


• Example 1- John bought a new commercial building in

1990. He paid VAT on the purchase but did not recover it as he used the building for VAT-exempt purposes

- VAT on sale? (say sale was 1 Jan 2007)


• Example 2- John bought a new commercial building in

2000. He paid VAT on the purchase and let the building to a solicitor for 4 years 9 months

- VAT implications?

VAT on property ('new rules')

• Secs 94-97 VATCA 2010• Post 1 July 2008- no distinction between long and short

leases- substantial interests in property now

treated the same (freehold equivalent)- finite VAT life on property- capital goods scheme (CGS)


• Sales of property – VAT applies if:

1. Property developed

2. Supplied in course of business

3. It is considered 'new'

• Must understand terms - 'new', 'complete', 'minor development', 'occupied'.


• When is property no longer new?• Sec 94(2) VATCA 2010- 5 years after completion...or...- 2 years after occupation if property has

been sold since completion with VAT charged

- previous supply can't be to connected party


• Anti Avoidance• Residential property developers- 2 and 5 year rules don't apply- first sale of residential units which were

built for sale always subject to VAT


• If property not new = sale is exempt- unless connected build agreement- unless parties 'opt to tax' the sale- if opt to tax, purchaser self-accounts- parties may need to negotiate this point


• Example 3- Big bank bought a new property in 2009

and paid VAT but could not recover the VAT. It sold the property on 1 Jan 2011

- is the sale subject to VAT?- what if sale is 1 Jan 2016?


• Example 4- Jim the accountant bought a new property

for his practice in 2009 and paid VAT which he recovered. He sold the property on 1 Jan 2011

- is the sale subject to VAT?- what if sale is 1 Jan 2016?


• Example 5- Bob the builder constructed 100 new

houses to sell in 2010 but he could not sell them. They remained idle and he eventually sold the first house in 2017

- is the sale subject to VAT?- what if the houses were rented first?


• Letting of property- exempt from VAT- landlord can 'opt to tax'- convey this in writing- parties may need to negotiate- 'letting by letting' basis


• Option to tax letting disallowed where:- residential property- connected parties (unless tenant has 90%

recovery)

- occupant connected to landlord (unless occupant has 90% recovery)


• Example 6- Jim purchases and then leases a new

office block to Big Bank (unconnected) for 10 years

- what are Jim's options?- what if Jim owns Big Bank?


• Example 7- Jim is constructing a new apartment block

which he hopes to sell to first-time buyers but he knows he may be forced to let the units if there are no borrowers

- what is Jim's VAT position?

VAT on property ('transitional')

• Applies to 'interests' held on 1 July 2008- freehold – if no entitlement to recover,

supply is exempt- can opt to tax- if entitlement to recover – new rules apply- Secs 95 and 96 VATCA 10


• Also applies to 'long' leasehold interests held on 1 July 2008

- If no entitlement to recover, assignment or surrender is exempt

- can opt to tax- if entitlement, assignment or surrender

vatable based on 20 year life – 'document'


• Waiver of exemption- pre 1 July 2008 waivers still apply- properties covered at that date- can be cancelled- 12-year rule for connected parties


• Example 8- Billy the bookie bought a new building on

1 Jan 2008 – he could not recover the VAT. He is planning to sell the property on 1 Jan 2012.

- will VAT apply to the sale?- what if Billy demolished the building and

rebuilt it prior to sale?


• Example 9- Vinnie the butcher took a 20-year lease

on his shop on 1 Jan 2002 and the lease was subject to VAT. He is surrendering the lease on 1 Jan 2012 to his landlord

- will VAT apply to the surrender?

VAT on Property (CGS)

• Capital Goods Scheme• Sec 64 VATCA 2010- 20 year VAT life- 10 years for 'refurbishments'- Annual monitoring of use of property- 5% per annum, 10% for refurbishments

VAT on property (CGS)

• Capital goods scheme contd.- 'big swing' – 50% points- obligation to keep records- letting with VAT charged is a 'taxable use'


• Example 10- Mary bought a property on 1 Jan 2010 for

her business and reclaimed all of the VAT (€200k) as she had 100% recovery. After 10 years, her recovery rate dropped to 90%

- what is the impact?


• Example 11- Mary sells the property after 15 years. As

the property is 'old' she does not charge VAT

- what are the implications for Mary?- what if she does charge VAT on the sale?

Case Study – BAT Enterprises

• Understand the background• Purchase and sale of goods• 5 transactions to comment on• Other taxes?• Sale of business• Property held personally

Supplies of services

• Section 25 VATCA 2010- 'anything other than goods....'- food/drink supply may be service- self-supply (canteens only)- Performance of an act- Omission of an act- Toleration of an act

Food & Drink

• Sec 25(2) VATCA 2010• Supply of food and drink is a service

where it is suitable for human consumption and made:– By a vending machine or– In the course of running a hotel, restaurant,

café, canteen, pub, catering or similar business

Food & Drink

• Vat classifications in Schedules to VATCA 2010 determines rate of VAT

• 9% - Sch 3 includes meals from 1/7/2011• Alcohol, soft drinks and bottled water –

always standard rate (21%/23%)• Check Schedules eg bread definitions

Self Supplies• Sec 27 VATCA 2010 – Regulation needed• Self supply of services occurs:

– Goods taken from business use by accountable person for private use of owner or staff or for other non business uses

– Services provided free by accountable person for the person or staff or other non business purposes

– Services supplied for the business which would not be VAT deductible if supplied by another accountable person

Self Supplies• Sec 27 VATCA 2010 – Regulation needed• Regulation 8 VATCA 2010 – only one• Staff Canteens• Self supply where employer provides free

canteen service• Based on cost to employer – not deductible• Hotel Scandic Case

– Where staff pay any amount, no self supply liability

Self Supplies – Immovable Goods• Different rules

• Sec 27(2) VATCA 2010• Self supply:

– Accountable person’s business assets– Used for private or non business use– By trader or staff– Within 20 years of acquisition

Supplies of services

• Services & Agents• Sec 28 VATCA 2010- disclosed- undisclosed- important to understand who is supplying

what....

Agents & Services

• Disclosed Agent– Agent issues invoice to vendor for services– Vendor issues invoice to purchaser

• Undisclosed Agent– Vendor issues invoice to agent– Agent issues invoice to purchaser– Both deemed simultaneous by agent– Agent’s invoice includes commission– Same rate of VAT on both services

Barristers

• Not entitled to sue clients for non payment of fees

• Tolsma ECJ Case– Supplier not entitled to consideration for

services

• Sec 28(2) VATCA 2010– Obliged to charge VAT on fees– Monies received deemed to be consideration

for services

Legal Services & Insured Persons

• Barristers and Solicitors• Insurance claims• Insurance companies appoints legal

service, but• Sec 28(3) VATCA deems service supplied

to insured person (and not the insurance co)

• VAT recovery if IP VAT registered

Services – place of supply

• Business to business – "B2B"- basic rule – where customer is

established

- establishment most closely associated with the supply


• Reverse charge applies where supply in in another EU State – B2B

• Quarterly filing of VIES returns from 1/1/2010

• Monthly filing if required


• Business to consumer – "B2C"- basic rule – where supplier established- what is a consumer?- what is an establishment?


• Exceptions to basic rules:- passenger transport services- e.g. Bus Eireann transports people from

Munich to Dusseldorf – German VAT applies (may be exempt but may not be)


• Exceptions to basic rules:- services relating to property- e.g. Ernie (Estate Agent) sells a house in

Paris for a client – his fee is subject to VAT in France.


• Exceptions continued:- work on moveable goods for consumer- e.g. John sends his iPod to Madrid to be

repaired – Spanish VAT- artistic, sporting, entertainment etc- e.g. Tiger Woods plays in a tournament in

Dublin and gets a fee – Irish VAT


• Exceptions continued:- restaurant/catering- e.g. catering service supplied by Dundalk

company in Newry – UK VAT- e.g. catering service on board flight from

Cork to Vienna (while the plane is over Germany!) – Irish VAT


• Exceptions continued:- short-term hire of means of transport- e.g. pick-up car in Spain for 4-week EU

driving holiday – Spanish VAT- note 'short-term' definitions

- agents / intermediaries


• Use & Enjoyment Provisions- electronically supplied services- e.g. Orange inc in the US supplies music

via download to Peter in Galway – Irish VAT

- goods used in the State- e.g. Irl Co leases goods to Australian Co

but the goods remain in Irl – Irish VAT


• Use & Enjoyment Provisions contd.- means of transport used outside the EU- e.g. Lease co in IFSC leases plane to Aer

Lingus – plane is used only in US – no Irish VAT

- telecomms / financial & intermediary services used in the State

Services - place of supply

• Certain services supplied outside EU• ‘fourth schedule services’• Place of supply is where customer located- such services supplied to consumers

outside EU are not subject to VAT in Ireland

- important to know which services are covered

Receipt of Services from Abroad• B2B – Irish business from non Irish supplier

• Sec 12(1) VATCA 2010• Reverse Charge applies• Cash flow neutral if 100% recovery• Translate FX to € @ CB rate or method

agreed with Revenue

Services Supplied to EU

• Irish supplier B2B• Customer established in EU• No Irish VAT• Quote customer VAT no on invoice and

indicate reverse charge applies• Who is accountable in other country?• Check if it is the Irish supplier

Supply of Services SummarySupplier Recipient Irish VAT? Irish VAT charged by

Irish Non EU Business No N/A

Irish EU Business No N/A

Irish Irish Business Yes Supplier

Irish Non EU PrivateGeneral Rule

Yes Supplier

Irish Non EU Private Sec 33(5) VATCA 10

No N/A

Irish EU Private Yes Supplier

Irish Irish Private Yes Supplier

Services – sale of business

• Section 26(2) VATCA 2010• Section 20(2) VATCA 2010- transfer of business relief- intellectual property, goodwill, patents- taxi license....• Supplies of intangible assets deemed not

to be a supply of services for the relief

Thresholds

• Thresholds – Sec 2 VATCA 2010• Goods - €75,000• Services - €37,500• Turnover exceeds or likely to exceed in

continuous 12 month period• Mixed good and services

– €75,000 only 90% turnover from sale of goods

Accountable persons

• Sections 5-13 VATCA 2010• Supplies >thresholds• Intra-community acquisitions• Promoters• Services received• ‘Principals' (construction industry)

Accountable persons

• Landowners (mobile traders)• Local authorities (certain activities)• NAMA• Greenhouse gas allowances• New means of transport• Scrap metal – reverse charge

Accountable persons

• Non-established traders– No threshold

• Distance sales• Farmers

– Certain activities obliged to register– Election to register– ICAs– Flat Rate addition

Accountable persons

• VAT groups• Section 15 VATCA 2010- established in the State- closely bound- Revenue approval required- single group 'remitter'

VAT Groups

• Ignore transactions within group• But...property transactions...• 'joint and several' liability• Benefits of VAT Group v when no benefit

Accountable persons

• Intending Traders.• Registration before trading• 'Rompelman' case• Statement of intent• Other tax consequences

VAT Recovery

• Section 59 VATCA 2010• 100% 'taxable' = 100% recovery• Zero 'taxable' = Zero recovery• Mixed bag?• Methods of apportionment

VAT recovery

• Section 60- non-deductible items

e.g. food, drink, entertainment- 'qualifying activities'

e.g. transportation outside State

e.g. FS outside the EU

- ‘qualifying vehicles’

Case Study 2 – Dry Run Ltd

• Prepare a letter to Sarah:

- personal expenditure- qualifying conference- foreign VAT (EU States)- goods from UK

Dry Run Ltd contd.

• Other issues

- 'qualifying vehicle'

• Sub-lease- exempt?- opt to tax?

VAT Invoices

• Valid VAT invoice to recover VAT• Supplier at risk of penalties• Supplier liable to correct rate of VAT• Regulation 20 VATCA 2010

– Requirements– Page 338 in VATCA

Credit Notes

• Discount or price adjustment• Reg 20 VATCA 2010• Supplier may adjust VAT liability• Purchaser must also adjust to avoid over

deduction

Amount on which VAT is charged• Section 37 VATCA 2010• Generally 'consideration'

–including taxes, charges, costs etc• ‘Self-supplies' – cost• ICAs - cost

Amount on which VAT is charged• Argos Distributors Case

• Sale of vouchers for discount• Vouchers accepted at face value• VAT on amount received or value?• ECJ – VAT on final amount received• Elida Gibbs case – VAT on net amount

received• Sec 43 VATCA 2010

Amount on which VAT is charged

• Market Value• Connected parties• Non-monetary consideration (e.g. barter

transactions)


• Market Value- e.g. Peter sells a commercial property to

his wife for €100 plus VAT even though the value is €100,000. She uses the property for an exempt purpose....


• Market Value- e.g. XYZ Ltd has full VAT recovery. Big

Bank plc has no VAT recovery. Both purchased new buildings in 2007 for €10m plus VAT and occupied them since. They agree to swap premises in 2011 and no cash changes hands.....VAT?

Bad Debts

• Regulation 10 VAT Regulations 2010– All reasonable steps taken to recover– Debt written off in accounts– Debt tax deductible– Cannot be connected parties

• e Brief 34/2008 • Revenue leaflet January 2010

Rates of VAT

• Section 46 & Schedules- 21% - 'catch-all'- 13.5% - Schedule 3- 9% - Schedule 3 (from 1/7/2011)- 4.8% - livestock- 0% - Schedule 2- Exempt – Schedule 1

Rates of VAT• Section 47- Composite V Multiple supply- Sec 2 - definitions- Cablelink case – Supreme court• ‘Two-thirds' rule – important to remember• Vital to be able to determine if supplying

goods or services or both!!

VAT due and payable

• Section 74 – earliest of:- when invoice raised – Sec 66 and Reg 20- when invoice should have been raised- payment (if cash-receipts basis - see

below)

VAT due and payable

• NB to know when a supply is made

–goods – usually on handover–services – when complete–what about ongoing?

VAT due and payable

• Cash-receipts basis – Section 80 VATCA 10

• 2 ways to qualify• Turnover < €1m or • 90% sales to unregistered persons• Very useful for cash-flow

VAT compliance matters

• Chapter 2 Part 9 – Invoices- certain information must be included- regulation 20, 2010

• Tax registration- TR1, TR2- Don't underestimate importance- Care needed - no backdating of elections


• Accounting for VAT- standard bi-monthly returns- annual (direct debit)- every 6 months (liability < €3k)- every 4 months (liability €3k - €14k)- monthly – constant repayment


• Completing the VAT Return- output VAT – regular sales & variety of

other potential amounts- input VAT – reclaimable VAT

• Annual Return of Trading Details


• Record keeping – Chapter 7 Part 9- 6 years- original documents• Property transactions


• Mandatory e-Filing• Sec 917 EA TCA – phased basis• Compulsory online filing• Phase 3A – 1st June 2011• VAT 3 and RTD• Penalties for non compliance• €1,520


• Interest and Penalties for late payment• 0.0274% per day – Sec 114 VATCA 2010• Higher rate than for IT, CGT, CT and CAT• Penalty Sec 115 - €4,000


• Expression of doubt – Section 81- lodged with return – on time- no interest or penalties if vat deemed due- genuine cases only

VAT Risk Management

• VAT return is a Tax Return• Who is responsible?• Sec 117 – penalty applies to persons

assisting• Systems in place?• Letters of engagement?

Revenue Commissioners

• Local Districts• Large Cases Division (LCD)• Revenue Technical Service

Research Issues

• EU Tax• EU Directives and Regulations• ECJ• Current issues for consultancy and

compliance• Working knowledge of business

Communication Skills

• Develop good working relationship with internal accounting team

• Regular communication• Clear understanding of work being done• SEC Regulations• ROS authorisation• Potential Money Laundering issues

Sample Paper 1

• Pharma Ireland Ltd• Disaster Insurance• Tim Turner• Sean Smith

Sample Paper 2

• The Trotters• Legislative Questions

– Question 2– Question 7– Question 8

Case Study 3 – Kate Thompson

• VAT rate for services• Exports• Transfer of business• VAT Group• Lease

Module Round Up

• Identify the issue– What is being supplied?– Who is supplying it?– Where is supplier located?– Where is recipient located?– What is the VAT treatment and who must

account for VAT?

Module Round Up

• Be familiar with the legislation and where to find things

• Information Leaflets can help but these are not the law

Module Round Up

• Basic Charging Section – is the supply subject to VAT?

• Part 3 Chapter 1– Goods• Section 93, 94, 95 – Property• Part 3 Chapter 3 – Services• Part 2– Accountable Persons• Part 5 Chapter 1 – Amount of VAT

Module Round Up

• Part 8 Chapter 1– Input Tax• Part 8 Chapter 2– Capital Goods Scheme• Section 80– Cash-receipts basis• Part 9– Records & Invoices• Part 9– Tax due and payable

Module Round Up

• Risk Management• Communication Skills• Learning Outcomes

educating supporting representing module 7 – value added tax chartered tax stage 2 30 th & 31...

Documents

rates of vat

vat planningpara

vat ratesschedule

vat recoverypara

vat returns

vat exemptionvatca

vat arisessection

vat purposes