PART 3

Value-Added Tax

107. —In this Part—

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

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

“Act of 1992” means the Finance Act, 1992 ;

“Act of 1999” means the Finance Act, 1999 .

108. —Section 1 of the Principal Act is amended by the substitution for the definition of “telecommunications services” of the following:

“‘telecommunications services’ means services relating to the transmission, emission or reception of signals, writing, images and sounds or information of any nature by wire, radio, optical or other electromagnetic systems and includes—

(a) the related transfer or assignment of the right to use capacity for such transmission, emission or reception. and

(b) the provision of access to global information networks;”.

109. —Section 6A (inserted by the Act of 1999) of the Principal Act is amended—

(a) by the substitution in paragraph (a) of subsection (2) of “investment gold, including investment gold which is represented by securities” for “investment gold which is represented by securities”,

and

(b) by the insertion of the following subsection after subsection (8):

“(9) Every trader in investment gold shall establish the identity of any person to whom such trader supplies investment gold when the total consideration which such trader is entitled to receive in respect of such supply, or a series of such supplies which are or appear to be linked, amounts to at least 15,000 euros, and such trader shall retain a copy of all documents used to identify the person to whom the investment gold is supplied as if they were records to be kept in accordance with section 16(1A) of this Act.”.

110. —Section 8 of the Principal Act is amended—

(a) in subsection (5):

(i) by the substitution of “goods or services, other than services of the kind referred to in paragraph (xiii) of the Sixth Schedule,” for “such goods or services”, and

(ii) by the substitution of “goods or services, other than services of the kind referred to in paragraph (xiii) of the Sixth Schedule.” for “goods or services.”,

(b) by the insertion of the following subsection after subsection (5):

“(5A) (a) Notwithstanding subsection (5), provision may be made by regulation for the cancellation, by the request of a person who supplies services of the kind referred to in paragraph (xiii) of the Sixth Schedule, of an election made by such person under this section and for the payment by such person to the Revenue Commissioners, in addition to any amount payable in accordance with subsection (5), of such an amount (hereafter referred to in this subsection as the ‘cancellation amount’), as shall be determined in accordance with paragraph (b), as a condition of cancellation and the cancellation amount shall be payable as if it were tax due in accordance with section 19 for the taxable period in which the cancellation comes into effect.

(b) (i) Where the person referred to in paragraph (a)—

(I) was entitled to deduct tax in accordance with section 12 in respect of the acquisition, purchase or development of immovable goods used by that person in the course of a supply of services of a kind referred to in paragraph (xiii) of the Sixth Schedule, or

(II) would be entitled to deduct tax in accordance with section 12 in respect of the acquisition, as a result of a transfer to that person, of immovable goods used by that person in the course of a supply of services of a kind referred to in paragraph (xiii) of the Sixth Schedule, if that tax had been chargeable but for the application of the provisions of section 3(5)(b)(iii) on that transfer,

then, in respect of each such acquisition, purchase or development, an amount (hereafter referred to in this subsection as the ‘adjustment amount’) shall be calculated in accordance with subparagraph (ii) and the cancellation amount shall be the sum of the adjustment amounts so calculated or, if there is only one such adjustment amount, that amount: but if there is no adjustment amount, the cancellation amount is nil.

(ii) The adjustment amount shall be determined by the formula—

where—

A is—

(I) the amount of tax deductible in respect of the said acquisition, purchase or development of the said immovable goods, or

(II) the amount of tax that would be deductible in respect of the said acquisition of the said immovable goods if the provisions of section 3(5)(b)(iii) had not applied to the transfer of those immovable goods,

and

B is the number of full years for which the said goods were used by the person in the course of the supply of services of a kind referred to in paragraph (xiii) of the Sixth Schedule: but if the said number of full years is in excess of 10, such adjustment amount shall be deemed to be nil.

(c) For the purposes of paragraph (b) a full year shall be any continuous period of 12 months.”,

and

(c) in subsection (6) (inserted by the Act of 1992) by the insertion after “subsection (5)” of “of subsection (5A)”.

111. —Section 11 of the Principal Act is amended in subsection (1) (inserted by the Act of 1992) by the substitution in paragraph (f) of “4.2 per cent” for “4 per cent” (inserted by the Act of 1999).

112. —Section 12 of the Principal Act is amended—

(a) by the insertion in paragraph (a) of subsection (1) of the following subparagraph after subparagraph (via) (inserted by the Act of 1999):

“(vib) the residual tax referred to in section 12C, being residual tax contained in the price charged to the taxable person for the purchase of agricultural machinery (within the meaning of section 12C), by means of documents issued to that person during the period in accordance with section 12C(1B),”,

and

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

“(4) (a) In this subsection—

‘deductible supplies or activities’ means the supply of taxable goods or taxable services, or the carrying out of qualifying activities as defined in subsection (1)(b);

‘dual-use inputs’ means goods or services (other than goods or services on the purchase or acquisition of which, by virtue of subsection (3), a deduction of tax shall not be made) which are not used solely for the purposes of either deductible supplies or activities or non-deductible supplies or activities;

‘non-deductible supplies or activities’ means the supply of goods or services or the carrying out of activities other than deductible supplies or activities;

‘total supplies and activities’ means deductible supplies or activities and non-deductible supplies or activities.

(b) Where a taxable person engages in both deductible supplies or activities and non-deductible supplies or activities then, in relation to that person’s acquisition of dual-use inputs for the purpose of that person’s business for a period, that person shall be entitled to deduct in accordance with subsection (1) only such proportion of tax, borne or payable on that acquisition, which is calculated in accordance with the provisions of this subsection and regulations, as being attributable to that person’s deductible supplies or activities and such proportion of tax is, for the purposes of this subsection, referred to as the ‘proportion of tax deductible’.

(c) For the purposes of this subsection and regulations, the proportion of tax deductible by a taxable person for a period shall be calculated on any basis which results in a proportion of tax deductible which correctly reflects the extent to which the dual-use inputs are used for the purposes of that person’s deductible supplies or activities and has due regard to the range of that person’s total supplies and activities.

(d) The proportion of tax deductible may be calculated on the basis of the ratio which the amount of a person’s tax-exclusive turnover from deductible supplies or activities for a period bears to the amount of that person’s tax-exclusive turnover from total supplies and activities for that period but only if that basis results in a proportion of tax deductible which is in accordance with paragraph (c).

(e) Where it is necessary to do so to ensure that the proportion of tax deductible by a taxable person is in accordance with paragraph (c), a taxable person shall—

(i) calculate a separate proportion of tax deductible for any part of that person’s business, or

(ii) exclude, from the calculation of the proportion of tax deductible, amounts of turnover from incidental transactions by that person of the type specified in paragraph (i) of the First Schedule or amounts of turnover from incidental transactions by that person in immovable goods.

(f) The proportion of tax deductible as calculated by a taxable person for a taxable period may be adjusted in accordance with regulations, if, for the accounting period in which the taxable period ends, that proportion does not correctly reflect the extent to which the dual-use inputs are used for the purposes of that person’s deductible supplies or activities or does not have due regard to the range of that person’s total supplies and activities.”.

113. —Section 12A (inserted by the Act of 1978) of the Principal Act is amended in subsection (1) by the substitution of “4.2 per cent” for “4 per cent” (inserted by the Act of 1999).

114. —Section 12C (inserted by the Act of 1999) of the Principal Act is amended by the insertion of the following subsections after subsection (1):

“(1A) A taxable dealer who purchases agricultural machinery from a person where the disposal of that agricultural machinery by such person to such taxable dealer was deemed in accordance with section 3(5)(c) not to be a supply of goods shall, subject to the provisions of this section and in accordance with subparagraph (vib) of paragraph (a) of subsection (1) of section 12, be entitled to deduct the residual tax, determined by the formula in subsection (3), contained in the price payable by such taxable dealer in respect of that purchase.

(1B) A person who disposes of agricultural machinery to a taxable dealer where the disposal of that agricultural machinery by such person to such taxable dealer was deemed in accordance with section 3(5)(c) not to be a supply of goods shall issue a document to the taxable dealer to whom the disposal is made and shall indicate on the document—

(a) that person’s name and address,

(b) the name and address of the taxable dealer,

(c) the date of issue of the document,

(d) a description of the agricultural machinery, including details of the make, model and, where appropriate, the year of manufacture, the engine number and registration number of that machinery,

(e) the consideration for the disposal of the agricultural machinery,

(f) confirmation that the disposal is deemed in accordance with section 3(5)(c) not to be a supply of goods, and

(g) such other particulars as may be specified by regulations, if any.”.

115. —Section 17 of the Principal Act is amended by the insertion in subsection (1AB) (inserted by the Finance Act, 1996 ) after “subsection (1AA)” of “or section 12C (1B)”.

116. —Section 20 of the Principal Act is amended—

(a) by the insertion in subsection (3) of the following paragraph after paragraph (b):

“(bb) An order under this subsection may, if so expressed, have retrospective effect.”,

(b) by the substitution in subsection (5) of the following paragraph for paragraph (a)—

“(a) Where, due to a mistaken assumption in the operation of the tax, whether that mistaken assumption was made by a taxable person, any other person or the Revenue Commissioners, a person—

(i) accounted, in a return furnished to the Revenue Commissioners, for an amount of tax for which that person was not properly accountable, or

(ii) did not, because that person’s supplies of goods and services were treated as exempted activities, furnish a return to the Revenue Commissioners and, therefore, did not receive a refund of an amount of tax in accordance with subsection (1), or

(iii) did not deduct an amount of tax in respect of qualifying activities, as defined in section 12(1)(b), which that person was entitled to deduct,

then, in respect of the total amount of tax referred to in subparagraphs (i), (ii) or (iii) (in this subsection referred to as the ‘overpaid amount’) that person may claim a refund of the overpaid amount and the Revenue Commissioners shall, subject to the provisions of this subsection, refund to the claimant the overpaid amount unless that refund would result in the unjust enrichment of the claimant.”,

(c) by the substitution in subsection (5)(d)(i) of “a loss of demand for those goods or services, for the period for which the claim is being made”, for “a loss of turnover”, and

(d) by the substitution in subsection (5)(d)(iii) of “loss of demand” for “loss of turnover”.

117. —Section 22 of the Principal Act is amended in subsections (1) and (2) by the substitution of “period” for “taxable period” wherever it occurs.

118. —Section 23 (inserted by the Act of 1978) of the Principal Act is amended in subsection (1):

(a) by the deletion of “consisting of one taxable period or of two or more consecutive taxable periods”, and

(b) by the deletion of “the taxable period or periods comprised in”.

119. —Section 25 of the Principal Act is amended in clause (i) of subsection (2) by the substitution of “periods” for “taxable periods”.

120. —Section 27 of the Principal Act is amended by the deletion of subsection (8).

121. —Section 32 of the Principal Act is amended in paragraph (ag) (inserted by the Act of 1992) of subsection (1) by the deletion of “by tax-free shops”.

122. —The First Schedule to the Principal Act is amended in paragraph (xv) (inserted by the Finance Act, 1980 ) by the insertion after “Finance Act, 1994,” of “of bets of the kind referred to in section 75 of the Finance Act, 1996 ,”.

123. —The Second Schedule to the Principal Act is amended—

(a) by the substitution of the following paragraph for paragraph (ia) (inserted by the Finance Act, 1994 ):

“(ia) subject to such conditions and in such amounts as may be specified in regulations,—

(a) the supply of goods, in a tax-free shop approved by the Revenue Commissioners, to travellers departing the State for a place outside the Community, or

(b) the supply, other than by means of a vending machine, of food, drink and tobacco products on board a vessel or aircraft to passengers departing the State for another Member State, for consumption on board that vessel or aircraft;”,

(b) by the insertion in paragraph (vb) (inserted by the Finance Act, 1993 ) after “paragraph (v)” of “but not including goods for supply on board such vessels or aircraft to passengers for the purpose of those goods being carried off such vessels or aircraft”, and

(c) by the insertion in subparagraph (a) of paragraph (xva) (inserted by the Finance Act, 1998 ) after “catalogues” of “, directories”.

124. —The European Communities (Value-Added Tax) Regulations, 1999 (S.I. No. 196 of 1999), shall be deemed to have been revoked with effect from 1 July 1999.