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10 1987

FINANCE ACT, 1987

PART III

Value-Added Tax

Interpretation ( Part III ).

38. —In this Part—

the Principal Act” means the Value-Added Tax Act, 1972 ;

the Act of 1978” means the Value-Added Tax (Amendment) Act, 1978 ;

the Act of 1985” means the Finance Act, 1985 ;

the Act of 1986” means the Finance Act, 1986 .

Amendment of section 1 (interpretation) of Principal Act.

39. —(a) Section 1 of the Principal Act is hereby amended by—

(i) the substitution in subsection (1) in the definition of “livestock” of “, goats, pigs and deer” for “and pigs”, and

(ii) the insertion in subsection (2) after paragraph (b) of the following:

“and

(c) money, which, in relation to money received by a person from another person, has been deducted in accordance with the provisions of—

(i) Chapter III of Part I of the Finance Act, 1987, or

(ii) section 17 of the Finance Act, 1970 ,

and has thereby ceased to be due to the first-mentioned person by the other person,”.

(b) The Imposition of Duties (No. 283) (Value-Added Tax) Order, 1986 (S.I. No. 412 of 1986), is hereby revoked.

Amendment of section 11 (rates of tax) of Principal Act.

40. —Section 11 of the Principal Act is hereby amended in subsection (1) (inserted by the Act of 1985) by the substitution in paragraph (d) of “1.7 per cent.” for “2.4 per cent.” (inserted by the Act of 1986).

Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

41. —Section 12 of the Principal Act is hereby amended—

(a) by the substitution of the following subsection for subsection (1) (inserted by the Act of 1978):

“(1) (a) In computing the amount of tax payable by him in respect of a taxable period, a taxable person may, insofar as the goods and services are used by him for the purposes of his taxable supplies or of any of the qualifying activities, deduct—

(i) the tax charged to him during the period by other taxable persons by means of invoices, prepared in the manner prescribed by regulations, in respect of supplies of goods or services to him,

(ii) in respect of goods imported by him in the period, the tax paid by him or deferred as established from the relevant customs documents kept by him in accordance with section 16(3),

(iii) the tax chargeable during the period in respect of goods treated as supplied by him in accordance with section 3 (1) (e),

(iv) the tax chargeable during the period in respect of services treated as supplied by him for consideration in the course or furtherance of his business in accordance with section 5 (3) (d),

(v) the tax chargeable during the period, being tax for which he is liable by virtue of section 5 (3A), in respect of services received by him,

(vi) if so provided by regulations and subject to and in accordance with any such regulations, the amount of tax, as defined, included in the consideration payable for specified second-hand goods or categories of second-hand goods acquired, in circumstances other than those described in the proviso to section 10 (2), for resale from a person who is not a taxable person or from a taxable person where the goods were used by the said taxable person for the purposes of a business carried on by him, but in relation to the acquisition or application of which he had borne tax and the goods were of such a kind or were used in such circumstances that no part of the said tax was deductible under this section,

(vii) the tax chargeable during the period, being tax for which he is liable by virtue of section 8(2), in respect of services received by him, and

(viii) tax charged to him during the period by means of invoices prepared in the manner prescribed by regulations and issued to him in accordance with section 12A.

(b) In paragraph (a) ‘qualifying activities’ means—

(i) transport outside the State of passengers and their accompanying baggage,

(ii) services specified in paragraph (i), (ix) (b), (c) or (d), or (xi), of the First Schedule, supplied—

(I) outside the Community, or

(II) directly in connection with the export of goods to a place outside the Community, and

(iii) supplies of goods or services outside the State which would be taxable supplies if made in the State.”,

(b) in subsection (3) (a) (inserted by the Act of 1978) by—

(i) the substitution for “in subsection (1), a deduction of tax under that subsection” of “in this section, a deduction of tax under this section”,

(ii) the insertion, after subparagraph (iii), of “or”, and

(iii) the deletion of all of that part of the said subsection (3)(a) which follows subparagraph (iv),

and the said subsection (3)(a), as so amended, is set out in the Table to this paragraph,

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(3) (a) Notwithstanding anything in this section, a deduction of tax under this section shall not be made if, and to the extent that, the tax relates to—

(i) the provision of food or drink, or accommodation or other personal services, for the taxable person, his agents or his employees, except to the extent, if any, that such provision constitutes a supply of services in respect of which he is accountable for tax,

(ii) entertainment expenses incurred by the taxable person, his agents or his employees,

(iii) the acquisition (including hiring) of motor vehicles otherwise than as stock-in-trade or for the purposes of a business which consists in whole or part of the hiring of motor vehicles or for use, in a driving school business, for giving driving instruction, or

(iv) the purchase of petrol otherwise than as stock-in-trade.,

and

(c) by the substitution of the following subsection for subsection (4):

“(4) Where goods or services (not being goods or services on the acquisition of which a deduction of tax shall not, in accordance with subsection (3), be made) are used by a taxable person for the purposes of supplies or activities in relation to which tax is deductible in accordance with this section and also for the purposes of other supplies or activities, such proportion only of tax shall be deductible as is attributable to those first-mentioned supplies or activities and the said proportion shall be determined in accordance with regulations.”.

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

42. —Section 12A (inserted by the Act of 1978) of the Principal Act is hereby amended by the substitution in subsection (1) of “1.7 per cent.” for “2.4 per cent.” (inserted by the Act of 1986).

Amendment of section 13 (remission of tax on goods exported, etc.) of Principal Act.

43. —Section 13 (inserted by the Act of 1978) of the Principal Act is hereby amended by the insertion in subsection (3) (c) after “within the State”, where that secondly occurs, of “or in respect of means of transport for hiring out for utilisation within the State”.

Amendment of section 32 (regulations) of Principal Act.

44. —Section 32 of the Principal Act is hereby amended by the insertion in subsection (2A) (inserted by the Act of 1978) after “section 5 (7),”, of “subsection 1 (a) (vi) of section 12,”.

Amendment of First Schedule to Principal Act.

45. —The First Schedule (inserted by the Act of 1978) to the Principal Act is hereby amended—

(a) by the substitution of the following paragraph for paragraph (i):

“(i) Financial services consisting of—

(a) the issue, transfer or receipt of, or any dealing in, stocks, shares, debentures and other securities, other than documents establishing title to goods,

(b) the arranging for, or the underwriting of, an issue specified in subparagraph (a),

(c) the operation of any current, deposit or savings account,

(d) the issue, transfer or receipt of, or any dealing in, currency, bank notes and metal coins, in use as legal tender in any country, excluding such bank notes and coins when supplied as investment goods or as collectors' pieces,

(e) lending money or affording credit otherwise than by means of hire-purchase or credit-sale transactions,

(f) the granting of, or any dealing in, credit guarantees or any other security for money and the management of credit guarantees by the person who granted the credit,

(g) the management of a unit trust scheme which is—

(I) registered under the Unit Trusts Act, 1972 ,

(II) administered by the holder of an authorisation granted pursuant to the European Communities (Life Assurance) Regulations (S.I. No. 57 of 1984), or by a person who is deemed, pursuant to Article 6 of those Regulations, to be such a holder, the criteria in relation to which are the criteria specified, in relation to an arrangement administered by the holder of a licence under the Insurance Act, 1936 , in section 7 (4) of the Unit Trusts Act, 1972 ,

(III) established solely for the purposes of superannuation fund schemes or charities, or

(IV) determined by the Minister for Finance to be a unit trust scheme to which the provisions of this subparagraph apply;

(h) services supplied to a person under arrangements which provide for the reimbursement of the person in respect of the supply by him of goods or services in accordance with a credit card, charge card or similar card scheme;”,

(b) in paragraph (ix) by—

(i) the deletion in subparagraph (a) of “and”,

(ii) the substitution of the following subparagraphs for subparagraphs (c), (d) and (e):

“(c) insurance services, and

(d) services specified in paragraph (i),”,

and

(iii) the insertion after subparagraph (d) (inserted by this Act) of the following:

“excluding management and safekeeping services in regard to the services specified in paragraph (i) (a), not being services specified in paragraph (i) (g);”,

and the said paragraph, as so amended, is set out in the Table to this paragraph,

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(ix) agency services in regard to—

(a) the arrangement of passenger transport or accommodation for persons,

(b) the collection of insurance premiums,

(c) insurance services, and

(d) services specified in paragraph (i),

excluding management and safekeeping services in regard to the services specified in paragraph (i) (a), not being services specified in paragraph (i) (g);,

(c) by the deletion in paragraph (xi) of “banking and”, and the said paragraph, as so amended, is set out in the Table to this paragraph,

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(xi) insurance services;,

and

(d) by the deletion of paragraphs (xia) (inserted by the Value-Added Tax (Exempted Activities) (No. 1) Order, 1985 (S.I. No. 430 of 1985)) and (xii).

Amendment of Second Schedule to Principal Act.

46. — The Second Schedule (inserted by the Finance Act, 1976 ) to the Principal Act is hereby amended by the deletion in subparagraph (d) (I) of paragraph (xii) (inserted by the Act of 1985) of “drained,”.

Amendment of Sixth Schedule to Principal Act.

47. —The Sixth Schedule (inserted by the Act of 1985) to the Principal Act is hereby amended by the insertion—

(a) after paragraph (xif) (inserted by the Act of 1986) of the following paragraph:

“(xig) tour guide services;”

and

(b) after paragraph (xiic) (inserted by the Act of 1986) of the following paragraphs:

“(xiii) the supply to a person of photographic prints (other than goods produced by means of a photocopying process), slides or negatives, which have been produced from goods provided by that person;

(xiiia) goods being—

(a) photographic prints (other than goods produced by means of a photocopying process), mounted or unmounted, but unframed,

(b) slides and negatives, and

(c) cinematographic and video film,

which record particular persons, objects or events, supplied under an agreement to photograph those persons, objects or events;

(xiiib) the supply by a photographer of—

(a) negatives which have been produced from film exposed for the purposes of his business, and

(b) film which has been exposed for the purposes of his business;

(xiiic) photographic prints produced by means of a vending machine which incorporates a camera and developing and printing equipment;

(xiiid) services consisting of—

(a) the editing of photographic, cinematographic and video film, and

(b) microfilming;

(xiiie) agency services in regard to a supply specified in paragraph (xiii);

(xiiif) services consisting of the acceptance for disposal of waste material;

(xiiig) instruction in the driving of mechanically propelled road vehicles, not being education, training or retraining of the kinds specified in paragraph (ii) of the First Schedule;

(xiiih) admissions to exhibitions, of the kind normally held in museums and art galleries, of objects of historical, cultural, artistic or scientific interest;”.