PART 3

Value-Added Tax

112. —In this Part “Principal Act” means the Value-Added Tax Act 1972 .

113. —Section (1) of the Principal Act is amended in subsection (1) by inserting the following definition after the definition of “development”:

“ ‘electronically supplied services’ includes—

(a) website supply, web-hosting, distance maintenance of programmes and equipment,

(b) supply of software and updating of it,

(c) supply of images, text and information, and making databases available,

(d) supply of music, films and games, including games of chance and gambling games, and of political, cultural, artistic, sporting, scientific and entertainment broadcasts and events, and

(e) supply of distance teaching,

and ‘electronic service’ shall be construed accordingly, but where the supplier of a service and his or her customer communicates by means of electronic mail, this shall not of itself mean that the service performed is an electronic service;”.

114. —Section 4 of the Principal Act is amended in subsection (3A)(d)—

(a) by substituting “the total amount on which tax was chargeable” for “the amount on which tax was chargeable”, and

(b) by substituting “in respect of or in relation to” for “in respect of” in both places where it occurs.

115. —Section 5 of the Principal Act is amended in subsection (6)—

(a) by inserting in paragraph (dd) “or a radio or television broadcasting service,” after “subsection (6A),”,

(b) by substituting in paragraph (e) “paragraphs (ddd), (ee) and (eee)” for “paragraphs (ddd) and (ee)”, and

(c) by inserting after paragraph (ee) the following paragraph:

“(eee) The place of supply of services of the description specified in paragraph (iiic) of the Fourth Schedule shall be deemed, for the purposes of this Act, to be the State when those services are supplied from outside the Community in the course or furtherance of business by a person who has an establishment outside the Community and has not also an establishment in the Community and are received, otherwise than for a business purpose, by a person whose usual place of residence is the State.”.

116. —The Principal Act is amended by inserting the following section after section 5:

“5A.—(1) In this section—

‘electronic services scheme’ means the special arrangements for the taxation of electronically supplied services provided for in Article 26c of Council Directive No. 77/388/EEC¹ of 17 May 1977;

‘EU value-added tax’ means value-added tax referred to in Council Directive No. 77/388/EEC of 17 May 1977 and includes tax within the meaning of section 1;

‘identified person’ has the meaning assigned to it by subsection (5);

‘Member State of consumption’ means the Member State in which the supply of the electronic services takes place according to Article 9(2)(f) of Council Directive No. 77/388/EEC of 17 May 1977;

‘Member State of identification’ means the Member State which the non-established person chooses to contact to state when his or her activity within the Community commences in accordance with the provisions of the electronic services scheme;

‘national tax number’ means a number (whether consisting of either or both numbers and letters) assigned to a non-established person by his or her own national taxation authorities;

‘non-established person’ means a person who has his or her establishment outside the Community and has not also an establishment in the Community and who is not otherwise required to be a person registered for value-added tax within the meaning of section 1;

‘scheme participant’ means a non-established person who supplies electronic services into the Community and who opts to use the electronic services scheme in any Member State;

‘VAT return’ means the statement containing the information necessary to establish the amount of EU value-added tax that has become chargeable in each Member State under the electronic services scheme.

(2) Subject to and in accordance with the provisions of this section, a non-established person may opt to apply the electronic services scheme to his or her supplies of electronic services to non-taxable persons within the Community.

(3) The Revenue Commissioners shall set up and maintain a register, referred to in this section as an ‘identification register’, of non-established persons who are identified in the State for the purposes of the electronic services scheme.

(4) A non-established person who opts to be identified in the State for the purposes of the electronic services scheme shall inform the Revenue Commissioners by electronic means in a manner specified by them, when his or her taxable activity commences and shall, at the same time, furnish them electronically with the following information—

(a) the person's name and postal address,

(b) his or her electronic addresses, including website addresses,

(c) his or her national tax number, if any, and

(d) a statement that the person is not a person registered, or otherwise identified, for value-added tax purposes within the Community.

(5) Where a person has furnished the particulars required under subsection (4), the Revenue Commissioners shall register that person in accordance with subsection (3), allocate to that person an identification number and notify such person electronically of it, and, for the purposes of this section, a person to whom such an identification number has been allocated shall be referred to as an ‘identified person’.

(6) An identified person shall, within 20 days immediately following the end of each calendar quarter, furnish by electronic means to the Revenue Commissioners a VAT return, prepared in accordance with, and containing such particulars as are specified in, subsection (7), in respect of supplies made in the Community in that quarter and shall at the same time remit to the Revenue Commissioners, into a bank account designated by them and denominated in euro, the amount of EU value-added tax, if any, payable by such person in respect of such quarter in relation to—

(a) supplies made in the State in accordance with section 5(6)(eee), and

(b) supplies made in other Member States in accordance with the provisions implementing Article 9(2)(f) of Council Directive No. 77/388/EEC of 17 May 1977 in such other Member States:

but if the identified person has not made any such electronic supplies to non-taxable persons into the Community within a calendar quarter that person shall furnish a nil VAT return in respect of that quarter.

(7) The VAT return referred to in subsection (6) shall be made in euro and shall contain the following details—

(a) the person's identification number,

(b) for each Member State of consumption where EU value-added tax has become due—

(i) the total value, exclusive of EU value-added tax, of supplies of electronic services for the quarter,

(ii) the amount of the said value liable to EU value-added tax at the applicable rate, and

(iii) the amount of EU value-added tax corresponding to the said value at the applicable rate,

and

(c) the total EU value-added tax due, if any.

(8) Notwithstanding section 10(9A), where supplies have been made using a currency other than the euro, the exchange rate to be used for the purposes of expressing the corresponding amount in euro on the VAT return shall be that published by the European Central Bank for the last date of the calendar quarter for which the VAT return relates, or, if there is no publication on that date, on the next day of publication.

(9) Notwithstanding section 12, a scheme participant who supplies services which are deemed in accordance with section 5(6)(eee) to be supplied in the State shall not, in computing the amount of tax payable by him or her in respect of such supplies, be entitled to deduct any tax borne or paid in relation to those supplies but shall be entitled to claim a refund of such tax in accordance with, and using the rules applicable to, Council Directive 86/560/EEC¹ of 17 November 1986, notwithstanding Articles 2(2), 2(3) and 4(2) of that Directive.

(10) A scheme participant who supplies services which are deemed in accordance with section 5(6)(eee) to be supplied in the State shall be deemed to have fulfilled his or her obligations under sections 9, 16 and 19 of this Act if such participant has accounted in full in respect of such supplies in any Member State under the provisions of the electronic services scheme.

(11) For the purposes of this Act, a VAT return required to be furnished in accordance with the electronic services scheme shall, in so far as it relates to supplies made in accordance with section 5(6)(eee), be treated, with any necessary modifications, as if it were a return required to be furnished in accordance with section 19.

(12) (a) An identified person shall—

(i) keep full and true records of all transactions covered by the electronic services scheme which affect his or her liability to EU value-added tax,

(ii) make such records available, by electronic means and on request, to the Revenue Commissioners,

(iii) make such records available, by electronic means and on request, to all Member States of consumption, and

(iv) notwithstanding section 16, retain such records for each transaction for a period of 10 years from the end of the year when that transaction occurred.

(b) A scheme participant who is deemed to supply services in the State in accordance with section 5(6)(eee) shall be bound by the requirements of subparagraphs (i), (ii) and (iv) in relation to such supplies.

(13) An identified person shall notify the Revenue Commissioners of any changes in the information submitted under subsection (4) and shall notify them if his or her taxable activity ceases or changes to the extent that such person no longer qualifies for the electronic services scheme. Such notification shall be made electronically.

(14) The Revenue Commissioners shall exclude an identified person from the identification register if—

(a) they have reasonable grounds to believe that that person's taxable activities have ended, or

(b) the identified person—

(i) notifies the Revenue Commissioners that he or she no longer supplies electronic services,

(ii) no longer fulfils the requirements necessary to be allowed to use the electronic services scheme, or

(iii) persistently fails to comply with the provisions of the electronic services scheme.

(15) The Revenue Commissioners may make regulations as necessary for the purpose of giving effect to the electronic services scheme.”.

117. —Section 7 of the Principal Act is amended by inserting the following after paragraph (a) of subsection (3)—

“(aa) the amount of tax deducted by him in accordance with section 12, prior to the commencement of the letting of the immovable goods to which the waiver relates, in respect of or in relation to his acquisition of his interest in, or his development of, those immovable goods,”.

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

(a) in subsection (1) by substituting “goods in the State in the circumstances set out in subsection (1A)(f) or supplies a service in the State in the circumstances set out in subsection (2)(aa),” for “a service in the State in the circumstances set out in subsection (2)(aa)”, and

(b) in subsection (1A) by inserting the following paragraph after paragraph (e)—

“(f) Where a person not established in the State supplies goods in the State which are installed or assembled, with or without a trial run, by or on behalf of that person, and where the recipient of the supply of those goods is—

(i) a taxable person,

(ii) a Department of State or local authority,

(iii) a body established by statute, or

(iv) a person who receives that supply for the purpose of any activity specified in the First Schedule,

then that recipient shall in relation to that supply of those goods be a taxable person or be deemed to be a taxable person and shall be liable to pay the tax chargeable as if that recipient supplied those goods in the course or furtherance of business.”.

119. —Section 11(1)(d) of the Principal Act is amended by substituting “13.5 per cent” for “12.5 per cent”.

120. —Section 12B of the Principal Act is amended—

(a) in subsection (10), by deleting “and” at the end of paragraph (a), by substituting “of that motor vehicle to that person, and” for “of that motor vehicle to that person.” in paragraph (b) and by inserting the following after paragraph (b):

“(c) a supply by a taxable dealer of a means of transport being a motor vehicle as defined in section 12(3)(b) which has been declared for registration in accordance with section 131 of the Finance Act 1992 on that dealer's own behalf, unless it can be shown to the satisfaction of the Revenue Commissioners that, on the basis of the use to which that means of transport has been put by that taxable dealer, the provisions of subsection (11)(b) should not apply to that supply.”,

and

(b) by inserting the following after subsection (10):

“(11)(a) Where a means of transport which is a motor vehicle as defined in section 12(3)(b) is declared for registration to the Revenue Commissioners in accordance with section 131 of the Finance Act 1992 by a taxable dealer on that dealer's own behalf and on which deductibility in accordance with section 12 has been claimed by that dealer, then that means of transport shall be treated for the purposes of this Act as if it were removed from stock-in-trade and such removal is deemed to be a supply of that means of transport by that taxable dealer for the purposes of section 3(1)(e).

(b) At the time when a taxable dealer supplies to another person a means of transport which is deemed to have been supplied in accordance with paragraph (a), then that means of transport is deemed to be re-acquired by that dealer as stock-in-trade and, notwithstanding subsection (2), the taxable dealer is entitled to deduct residual tax referred to in subsection (1) and in that case for the purposes of the formula in subsection (4) the residual tax is calculated as if ‘A’ were equal to the total of—

(i) the amount on which tax was chargeable on the supply of that means of transport to the dealer,

(ii) the tax which was chargeable on the supply referred to at subparagraph (i), and

(iii) the vehicle registration tax accounted for by that dealer in respect of the registration of that means of transport,

and, apart from the cases provided for in paragraph (c), the amount referred to in subparagraph (i) is the amount on which tax was chargeable on the supply of that means of transport in accordance with section 3(1)(e).

(c) Where a taxable dealer declares a means of transport for registration in the circumstances described in paragraph (a) but does not claim deductibility in accordance with section 12 in respect of that means of transport, then paragraph (b) applies when that dealer supplies that means of transport to another person.”.

121. —Section 16 of the Principal Act is amended—

(a) in subsection (3) by inserting “, subject to subsection (4),” after “any copy thereof which is in the power, possession or procurement of the person shall”, and

(b) by inserting the following subsection after subsection (3):

“(4) Notwithstanding the retention period specified in subsection (3) the following retention periods shall apply:

(a) where a person acquires or develops immovable goods to which section 4 applies, the period for which that person shall retain records pursuant to this section in relation to that person's acquisition or development of those immovable goods shall be the duration that such person holds a taxable interest in such goods plus a further period of six years,

(b) where a person exercises a waiver of exemption from tax in accordance with section 7, the period for which that person shall retain records pursuant to this section shall be the duration of the waiver plus a further period of six years.”.

122. —Section 17 of the Principal Act is amended—

(a) by inserting in subsection (1) “or to a Department of State or local authority or to a body established by statute or to a person who carries on an exempted activity” after “who supplies goods or services to another taxable person”,

(b) by deleting in subsection (10)(a) “goods or services are supplied to a registered person by another registered person or”,

(c) by substituting in subsection (10)(b) “agricultural produce” for “goods”, and

(d) by inserting the following after subsection (13):

“(14) (a) An invoice required under this section to be issued in respect of a supply by a person, in this subsection referred to as the ‘supplier’, is deemed to be so issued by that supplier if that invoice is drawn up and issued by the person to whom that supply is made, in this subsection referred to as the ‘customer’, where—

(i) there is prior agreement between the supplier and the customer that the customer may draw up and issue such invoice,

(ii) the customer is a person registered for value-added tax,

(iii) any conditions which are imposed by this Act or by regulations on the supplier in relation to the form, content or issue of the invoice are met by the customer, and

(iv) agreed procedures are in place for the acceptance by the supplier of the validity of the invoice.

(b) An invoice, which is deemed to be issued by the supplier in accordance with paragraph (a), is deemed to have been so issued when such invoice is accepted by that supplier in accordance with the agreed procedures referred to in paragraph (a)(iv).

(c) An invoice required to be issued by a supplier under this section shall be deemed to be so issued by that supplier if—

(i) that invoice is issued by a person who acts in the name and on behalf of the supplier, and

(ii) any conditions which are imposed by this Act or by regulations on the supplier in relation to the form, content or issue of the invoice are met.

(d) Any credit note or debit note issued in accordance with this section which amends and refers specifically and unambiguously to an invoice is treated as if it were an invoice for the purposes of this subsection.

(e) The Revenue Commissioners may make regulations in relation to the conditions applying to invoices covered by this subsection.

(15)(a) A person who issues, or is deemed to issue, an invoice under this section shall ensure that—

(i) a copy of any invoice issued by such person,

(ii) a copy of any invoice deemed to be issued by such person in the circumstances specified in subsection (14), and

(iii) any invoice received by such person,

is stored, and for the purposes of section 16(1) the reference to the keeping of full and true records therein shall be construed accordingly in so far as it relates to invoices covered by this section.

(b) Any invoice not stored by electronic means in a manner which conforms with requirements laid down by the Revenue Commissioners shall be stored within the State, but subject to the agreement of the Revenue Commissioners and any conditions set by them such invoice may be stored outside the State.”.

123. —Section 19 of the Principal Act is amended by inserting the following after subsection (5):

“(6) Notwithstanding the provisions of subsection (3), in cases where the provisions of section 5A are applied, the tax shall be payable at the time the VAT return is required to be submitted in accordance with section 5A(6).”.

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

(a) in subsection (4)(a)—

(i) by substituting “1 May 2003” for “the 1st day of May, 1998”, and

(ii) by substituting “six years” for “ten years”,

(b) in subsection (4)(b)—

(i) by substituting “1 May 2003” for “the 1st day of May, 1998”,

(ii) by substituting “1 January 2005” for “the 1st day of May, 1999,”, and

(iii) by substituting “four years” for “six years”,

(c) in subsection (5)(e) by inserting “together with any interest payable in accordance with section 21A” after “refund to the claimant that part of the withheld amount”, and

(d) by inserting the following subsection after subsection (6):

“(7) The Revenue Commissioners shall not refund any amount of tax except as provided for in this Act, or any order or regulation made under this Act.”.

125. —The Principal Act is amended by inserting the following section after section 21—

“21A.—(1) For the purposes of this section—

‘claimant’ means a person who submits a valid claim for a refundable amount;

‘overpaid amount’ means an amount which is a refundable amount as a result of a claimant having made a payment of tax;

‘refundable amount’ means an amount which a person is entitled to receive from the Revenue Commissioners in accordance with this Act or any order or regulation made under this Act and which is claimed within the period provided for in subsection 20(4), but such amount does not include interest payable under this section; ‘valid claim’ means a return or a claim, furnished in accordance with this Act or any order or regulation made under it, and which includes all information required by the Revenue Commissioners to establish the refundable amount.

(2) Where a mistaken assumption in the operation of the tax is made by the Revenue Commissioners and as a result a refundable amount is payable to a claimant, interest at the rate set out in subsection (4) or prescribed by order under subsection (7) shall, subject to section 1006A(2A) of the Taxes Consolidation Act 1997 , be payable by the Revenue Commissioners on that amount from—

(a) in the case of an overpaid amount, the day that overpaid amount was received by the Revenue Commissioners,

(b) in the case of any other refundable amount, the 19th day of the month following the taxable period in respect of which a claimant would have been entitled to receive a refundable amount but for the mistaken assumption in the operation of the tax by the Revenue Commissioners, but where a return was due in accordance with section 19 from that claimant in respect of that taxable period, the day such return was received,

to the day on which the refundable amount is paid by the Revenue Commissioners to the claimant.

(3) Where, for any reason other than a mistaken assumption in the operation of the tax made by the Revenue Commissioners, a refundable amount is payable to a claimant but is not paid until after the expiry of six months from the day the Revenue Commissioners receive a valid claim for that amount, interest at the rate specified in subsection (4) or prescribed by order under subsection (7) shall, subject to section 1006A(2A) of the Taxes Consolidation Act 1997 , be payable by the Revenue Commissioners on that amount from the day on which that six months expires to the day on which the refundable amount is paid by the Revenue Commissioners to the claimant.

(4) Interest payable in accordance with this section shall be simple interest payable at the rate of 0.011 per cent per day or part of a day, or such other rate as may be prescribed by the Minister for Finance by order under subsection (7).

(5) Interest shall not be payable if it amounts to less than €10.

(6) (a) The Revenue Commissioners shall not pay interest in respect of any amount under this Act except as provided for by this section.

(b) This section shall not apply in relation to any refund of tax in respect of which interest is payable under or by virtue of any provision of any other enactment.

(7) (a) The Minister for Finance may, from time to time, make an order prescribing a rate for the purposes of subsection (4).

(b) Every order made by the Minister for Finance under paragraph (a) shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done under it.

(8) The Revenue Commissioners may make regulations as necessary governing the operation of this section.”.

126. —Section 22 of the Principal Act is amended by replacing the proviso in subsection (1) with the following:

“Provided that where the Revenue Commissioners are satisfied that—

(a) the amount so estimated is excessive, they may amend the amount so estimated by reducing it, or

(b) the amount so estimated is insufficient, they may amend the amount so estimated by increasing it,

then, in either case, they shall serve notice on the person concerned of the revised amount estimated and such notice shall supercede any previous notice issued under this subsection.”.

127. —Section 27 of the Principal Act is amended—

(a) by inserting the following subsection after subsection (1):

“(1A) Where a person fraudulently or negligently fails to comply with a requirement in accordance with this Act or regulations to furnish a return, that person shall be liable to a penalty of—

 (a) €125, and

 (b) the amount, or in the case of fraud twice the amount, of the difference between—

(i) the amount of tax properly payable by such person if such return had been furnished by that person and that return had been correct, and

(ii) the amount of tax (if any) paid in respect of the taxable period for which the said return was not furnished.”,

and

(b) in subsection (2)—

(i) by substituting “subsection (1) or (1A)” for “the foregoing subsection”, and

(ii) by substituting “any reference in those subsections” for “the reference in paragraph (a) of that subsection”.

128. —(1) Section 29 of the Principal Act is amended—

(a)  in subsection (1), by substituting “for the recovery of the penalty in any court of competent jurisdiction as a liquidated sum, and, where appropriate, section 94 of the Courts of Justice Act 1924 shall apply accordingly.” for “for the recovery of the penalty in the High Court as a liquidated sum and the provisions of section 94 of the Courts of Justice Act, 1924 , shall apply accordingly.”, and

(b)  in subsection (6), by substituting “the rules of court” for “the rules of the High Court”.

(2) Subsection (1) applies as respects civil proceedings commenced on or after the passing of this Act.

129. —Section 30 of the Principal Act is amended—

(a)  in subsection (4)(a)(i)—

(i) by substituting “1 May 2003” for “the 1st day of May, 1998”, and

(ii) by substituting “six years” for “ten years”,

and

(b)  in subsection (4)(a)(ii)—

(i) by substituting “1 May 2003” for “the 1st day of May, 1998”,

(ii) by substituting “1 January 2005” for “the 1st day of May, 1999,”, and

(iii) by substituting “four years” for “six years”.

130. —Section 32 of the Principal Act is amended in subsection (1)—

(a) by inserting the following after paragraph (b):

“(ba) the manner in which the electronic services scheme referred to in section 5A shall operate;”,

and

(b) by inserting the following after paragraph (m):

“(ma) the conditions governing a person's entitlement to interest in accordance with section 21A;”.

131. —The Fourth Schedule to the Principal Act is amended by inserting the following after paragraph (iiia):

“(iiib) radio and television broadcasting services;

 (iiic) electronically supplied services;”.

¹O.J. No. L 145 of 13 June, 1977, p.1

¹O.J. No. L326 of 21 November, 1986, p.1