Value-Added Tax and VAT on Property, Finance (No. 2) Act 2023
- Chapter 3 Taxable Persons and Accountable Persons
- 3.1 Introduction
- 3.2 Accountable Persons
- 3.3 Electing to be an Accountable Person
- 3.4 Persons Making Intra-Community Acquisitions
- 3.5 Accountable Persons - Supply and Installation of Goods
- 3.6 Accountable Person - Certain Supplies of Gas, of Electricity and of Heat or Cooling Energy
- 3.7 Accountable Persons - Reverse Charge Cross-Border Services
- 3.8 Accountable Persons - Domestic Reverse Charge
- 3.9 Accountable Persons - Premises Providers
- 3.10 Clubs and Associations
- 3.11 Public Bodies
- 3.12 Not-for-Profit Organisations
- 3.13 Partnerships/Joint Ventures
- 3.14 Insolvent Situations
- 3.15 Agents
- 3.16 Foreign Traders who are Taxable Persons in Ireland
- 3.17 Groups
- Chapter 8 Supply of Services
- 8.1 Introduction
- 8.2 Supply of a Service
- 8.3 Link Between Supply and Consideration
- 8.4 The Meaning of “Established”/“Establishment”
- 8.5 Transfer of Business – Services
- 8.6 Self-Supply of Services
- 8.7 Catering Services
- 8.8 Undisclosed Agent
- 8.9 Services of Barristers
- 8.10 Legal Services Supplied to Insurers
- 8.11 Use of assets in Settlement of a Debt
- 8.12 Supplies of Power
- 8.13 Composite and Multiple Supplies
- 8.14 Auctioneers
- 8.15 Two Thirds Rule
- 8.16 Place of Supply of Services - Introduction
- Chapter 10 Registration
- 10.1 Introduction
- 10.2 Accountable Persons
- 10.3 Applying for Registration
- 10.4 Persons who Supply Taxable Goods and Services
- 10.5 Thresholds
- 10.6 Foreign Traders with no Establishment in Ireland
- 10.7 Call-off Stock and Consignment Stock
- 10.8 Performers – Cultural, Artistic, Entertainment and Similar Services
- 10.9 Farmers and Fishermen
- 10.10 Racehorse Training
- 10.11 Public Bodies
- 10.12 Trade Protection Associations and Student Unions
- 10.13 Electing to Register
- 10.14 Connected Persons
- 10.15 Pre-trading Registration
- 10.16 De-registering
- 10.17 Persons who Make Intra-Community Acquisitions
- 10.18 Reverse Charge Services
- 10.19 Group Registration
- 10.20 Administration Issues
- Chapter 22 Non-Established Traders
- 22.1 Introduction
- 22.2 Supplies from Stocks of Goods Held in Ireland
- 22.3 Call Off Stock – Special Provisions
- 22.4 Distance Sales into Ireland
- 22.5 Mobile Traders
- 22.6 Supply and Installation of Goods in Ireland
- 22.7 Gas, Electricity, Heat or Cooling Energy
- 22.8 Work on Immovable Goods
- 22.9 Work on, or Valuation of, Movable Goods
- 22.10 Cultural, Artistic, Sporting, Scientific, Educational, Entertainment and Similar Services
- 22.11 Electronically Supplied Services
- 22.12 Transport Services
- 22.13 Non-EU Based Supplier Hiring out Goods Used and Enjoyed in Ireland
- 22.14 Non-EU Based Trader Supplying Telecommunications, Radio or Television Broadcasting Services
- 22.15 Repayment to Foreign Businesses
- 22.16 VAT 60A Procedure
- Chapter 25 Anti-Avoidance
- 25.1 Introduction
- 25.2 Background
- 25.3 Consequences of VAT Avoidance
- 25.4 Development of General Anti-avoidance in the UK and Ireland
- 25.5 VAT Anti-avoidance Legislation
- 25.6 EU VAT Anti-avoidance Case Law
- 25.7 Summary of the Practical Considerations in the Application of the EU Doctrine of Abuse of Rights
- 25.8 Conclusion
- Chapter 26 Revenue Powers
- 26.1 Introduction
- 26.2 Power to Inspect Records
- 26.3 Power to Make Regulations
- 26.4 Power to Determine VAT Rates and Exemptions
- 26.5 Power to Raise Assessments, Estimate Liability, and to Refuse Claims
- 26.6 Power to Seize Goods
- 26.7 Power to Impose a Value
- 26.8 Power to Hold a Person Other than the Trader Liable for VAT
- 26.9 Power to Require Security
- 26.10 Power to Reject an Expression of Doubt
- 26.11 Power to Admit to a VAT Group, Remove from a VAT Group and Compulsorily VAT Group
- 26.12 Compulsory Registration of Persons Providing Sports Facilities
- 26.13 Power to Authorise a VAT Refunding Agent
- 26.14 Power to Refuse to Treat a Person as an Accountable Person
- 26.15 Notice of Requirement to Furnish Certain Information
- 26.16 Notice of Requirement to Issue a Document
- 26.17 Joint and Several Liability for Tax
- 26.18 Power to Notify and Publish the Cancellation of a VAT Number
- 26.19 Power to Require Appointment of a Tax Representative
- Chapter 28 Interest and Penalties
- 28.1 Introduction
- 28.2 Interest Payable to Revenue
- 28.3 Covid-19: Warehousing and Interest
- 28.4 Letter of Expression of Doubt - Non Application of Interest
- 28.5 Interest on refunds of tax
- 28.6 Fixed Penalties - Failure to Comply
- 28.7 Penalties - Deliberate or Careless Breaches
- 28.8 Mitigation of Tax Geared Penalties
- VAT on Property
- How to use this Book
- TABLE OF CASES
- TABLE OF STATUTES
- A Note on Property Law for Beginners
- Chapter 2 VAT on the Sale of a Property
- PART I – THE FOUR PRELIMINARY TASKS
- 2.3 The Four Preliminary Tasks
- 2.3.1 First preliminary task: is the seller acting in the course of business for VAT purposes?
- 2.3.2 Second preliminary task: find out is there a “sale” for VAT purposes
- 2.3.3 Third preliminary task: find out if the sale is subject to the standard rules or the transitional rules
- 2.3.4 Fourth preliminary task: find out if you are selling a “building” or “a property other than a building”
- 2.3.5 Summary of Part I
- PART II – THE FIVE CATEGORIES OF EXEMPTION
- 2.4 The Five Categories of Exemption
- 2.4.1 Exempt Category 1: “Property that has not been developed in the last 20 years”?
- 2.4.2 Exempt Category 2: “Old Buildings”
- 2.4.3 Exempt Category 3: “Used Second-hand Building”
- 2.5 Sale of property other than buildings
- 2.5.1 Exempt Category 1: “property that has not been developed in the last 20 years”
- 2.5.2 Exempt Category 4: “Old Property”?
- 2.5.3 Exempt Category 5: “Used Second-hand Property”?
- 2.6 Partially Completed Buildings or Properties
- 2.7 Compare and Contrast the Five Exempt Categories
- 2.8 Worked Examples of How VAT Applies to the Sale of an Ownership Interest
- PART III – THE OPTION TO TAX AN EXEMPT SALE
- 2.9 The Option to Tax an Exempt Sale
- 2.9.1 The option
- 2.9.2 Accounting for VAT on an opted sale
- 2.9.3 To opt, or not to opt, that is the question
- 2.9.4 Tax tip, tax saving
- 2.9.5 Anomaly
- 2.10 Stop
- PART IV – THE KEY DEFINITIONS
- 2.11 “Completed”
- 2.12 “Occupied”
- 2.13 “Development”
- 2.13.1 Planning permission
- 2.13.2 Area developed
- 2.13.3 Relevance of whether property is developed or not
- 2.13.4 The Emmen case
- 2.13.5 Section 639 of the Taxes Consolidation Act 1997
- 2.14 “Significant Development”
- 2.15 “Buildings”
- 2.16 “Freehold equivalent”
- PART V – SPECIFIC RULES FOR SPECIFIC TRANSACTIONS
- 2.17 Sales of Residential Buildings by Developers or Persons Connected with Developers
- 2.17.1 Why was this rule introduced?
- 2.17.2 The impact of letting the property on the developer’s VAT recovery
- 2.17.3 What is the relief?
- 2.17.4 Does the relief apply to properties completed before 1 July 2008?
- 2.18 Connected Development Contracts: Anti-avoidance Law on Sale of Undeveloped Land
- 2.19 The Sale of a Freehold in Connection with the Transfer of a Business
- 2.19.1 Transfer of Business and VAT recovery on costs
- 2.19.2 Transfer of Business (“TOB”) relief can apply to the sale of property
- 2.20 The Sale of an Ownership Interest Within a VAT Group
- 2.21 The “Sale” of an Ownership Interest by Compulsory Purchase or by Seizure
- 2.22 The Mortgage and Repossession of an Ownership Interest
- 2.23 Options to Buy
- 2.24 Sale of a Private Asset by a Registered Person
- 2.25 Rent-to-Buy Schemes
- 2.26 The Forfeiture of the Deposit on Failure to Complete
- 2.27 Granting of an Easement
- 2.28 The Self-supply of an Ownership Interest
- 2.29 Transfer to Private Use
- 2.30 Gifts
- PART VI – ACCOUNTING FOR VAT ON THE SALE
- 2.31 The Amount on which VAT is Charged on the Sale of an Ownership Interest
- 2.31.1 The majority of sales
- 2.31.2 Stamp duty
- 2.31.3 Market price
- 2.31.4 The interaction between the market value rules and the Capital Goods Scheme
- 2.32 The Rate at which VAT is Charged on the Sale of an Ownership Interest
- 2.32.1 The majority of sales
- 2.32.2 Composite or multiple supplies
- 2.32.3 What is a composite supply?
- 2.32.4 What is a multiple supply?
- 2.32.5 Apportioning the consideration
- 2.32.6 Composite and multiple supplies case law
- 2.32.7 Where are we now with composite and multiple supplies?
- 2.33 The Place of Supply – The Country in which the Sale of an Ownership Interest is Charged to VAT
- 2.34 The Time when the Charge to VAT on the Sale of an Ownership Interest Arises – The Triggering Event
- 2.35 The Contract for the Sale of an Ownership Interest
- Chapter 3 Lettings
- PART I – THE VAT TREATMENT OF LETTINGS
- 3.2 An Overview of the VAT Treatment of Lettings
- 3.3 The Two-Step Approach
- 3.4 A More Detailed Look at Step 1 – Determining the Correct VAT Treatment to be Applied to a Letting
- 3.5 A More Detailed Look at Step 2 – Applying the Correct VAT Treatment to the Letting
- 3.5.1 Applying the standard rules
- 3.5.2 Applying the transitional rules
- 3.5.3 Applying the waiver of exemption
- 3.6 Remember the Capital Goods Scheme Implications of Granting a Letting
- 3.7 Summary
- PART II – A MORE DETAILED LOOK AT LETTINGS
- 3.8 The Exemption for Lettings
- 3.9 The Option to Tax
- 3.9.1 How do you opt to tax?
- 3.9.2 Remember the VAT clause!
- 3.9.3 Is including a VAT clause sufficient to exercise the option?
- 3.9.4 When can you exercise an option?
- 3.9.5 Can you backdate an option?
- 3.9.6 The deemed option to tax
- 3.9.7 When can you not exercise an option to tax?
- 3.9.8 The option to tax can be exercised if the connected tenant/occupant is entitled to recover at least 90% of the VAT charged on the rent
- 3.9.9 What does “connected” mean?
- 3.9.10 Terminating the option to tax
- 3.9.11 Automatic termination of the option to tax – connected lettings
- 3.9.12 The option to tax and premia
- 3.9.13 The option to tax – letting by letting
- 3.10 The Waiver of Exemption
- 3.10.1 Introduction
- 3.10.2 So what is a waiver?
- 3.10.3 There was a choice
- 3.10.4 No new waivers after 1 July 2008
- 3.10.5 Existing waivers continue
- 3.10.6 Are waivers still restricted to lettings of less than ten years?
- 3.10.7 The impact of a waiver of exemption
- 3.10.8 The differences between the waiver of exemption and the option to tax
- 3.10.9 Cancelling a waiver of exemption
- 3.10.10 Selling a property before cancellation of your waiver
- 3.10.11 Finance Act 2009 changes
- 3.10.12 Letting a property after cancelling your waiver of exemption
- 3.10.13 Sale of a property after the cancellation of a waiver
- 3.10.14 The implications of making a taxable sale after cancelling a waiver of exemption
- 3.10.15 The implications of making an exempt sale after cancelling a waiver of exemption
- 3.10.16 The waiver of exemption and residential lettings
- 3.10.17 Backdating a waiver of exemption
- 3.11 Premiums on the Grant of a Lease
- 3.12 Reverse Premiums
- 3.13 Assignments
- 3.13.1 Assignments pre 1 July 2008
- 3.13.2 Assignments post 1 July 2008 – not transitional interests
- 3.13.3 Assignments post 1 July 2008 – transitional interests
- 3.13.4 Payment by the assignor to the assignee
- 3.13.5 Payment by the assignee to the assignor
- 3.14 Surrenders
- 3.14.1 VAT treatment of a surrender before 1 July 2008
- 3.14.2 Surrenders post 1 July 2008 – transitional interests
- 3.14.3 VAT treatment of a surrender after 1 July 2008
- 3.14.4 What if payment is made for the surrender?
- 3.14.5 Break clauses and surrenders
- 3.15 Lease Variations
- 3.16 Leases Within a VAT Group
- 3.17 Dilapidations
- 3.18 Election to Register for VAT – Holiday Homes
- Appendix – Connected Persons
- Chapter 4 The Capital Goods Scheme (“CGS”)
- PART I – AN OVERVIEW
- 4.1 Introduction
- 4.2 Why was the CGS Introduced?
- 4.3 How does the CGS Match VAT Recovery to VATable Use of the Property?
- 4.4 A Basic Overview of the CGS
- PART II – A DETAILED LOOK AT THE CGS – THE TERMS AND FORMULA
- 4.5 When does the CGS Apply?
- 4.6 What is a Capital Good?
- 4.7 Applying the CGS
- 4.8 The Four Calculations that Underpin the CGS
- 4.9 When does the Adjustment Period Start?
- 4.10 How do you Account for the Adjustment?
- 4.11 A Glossary of Terms
- 4.12 A Worked Example of a Capital Goods Scheme
- 4.12.1 Step 1 – Recovering the VAT paid
- 4.12.2 The second step – working out the “Total reviewed deductible amount”
- 4.12.3 Step 3 – The first adjustment
- 4.12.4 Step 4 – The second interval adjustment
- 4.12.5 Step 5 – The third interval adjustment
- 4.12.6 Step 6 – The fourth interval adjustment
- 4.12.7 Step 7 – The remaining intervals
- 4.12.8 The Capital Goods Record
- 4.12.9 The amount of VAT recovered – check
- 4.12.10 Summary
- PART III – OTHER CALCULATIONS UNDER THE CGS
- 4.13 Non-Use of the Capital Good
- 4.13.1 What happens if a capital good is not used during the initial interval?
- 4.13.2 What happens if a capital good is not used in the second or a subsequent interval?
- 4.13.3 What does “use” mean?
- 4.14 What Happens if my Accounting Year-end Changes?
- 4.15 Why is the Initial Interval Set at the First 12 Months of Use?
- 4.16 Calculating the Interval Adjustment and the Annual Adjustment
- 4.17 Selling the Property During the CGS Period
- 4.17.1 The impact of making a taxable sale
- 4.17.2 The purchaser’s position
- 4.17.3 The impact of making an exempt sale
- 4.17.4 The purchaser’s position
- 4.17.5 The interaction between the CGS and the Option to Tax a Sale
- 4.17.6 Sale of part of a capital good
- 4.18 A Significant Change in Taxable Use of the Capital Good – “The Big Swing”
- 4.19 The CGS Implications of Cancelling an Option to Tax
- 4.20 The CGS Implications of Opting to Tax
- 4.21 The CGS Implications of Granting a Letting and not Opting to Tax
- 4.22 Some Points on the CGS and Transfer of Business Relief
- 4.22.1 VAT recovery on a VAT exempt property under Transfer of Business
- 4.22.2 The CGS implications of a sale between connected persons
- 4.22.3 The VAT status of the adjustment amount
- 4.22.4 The interaction of the connected party provisions with the market value provisions
- 4.22.5 Avoiding paying the adjustment amount
- 4.22.6 The interaction of the Companies Act 2014, VAT Transfer of Business Relief and the Capital Goods Scheme
- 4.23 Refurbishments Carried Out by a Tenant
- 4.24 Destroyed Capital Goods
- 4.25 The Impact of Changing the Year-End During the Adjustment Period
- 4.26 Direct Tax Implications of CGS Adjustments
- Chapter 5 The Transitional Measures
- PART I - THE TRANSITIONAL RULES
- 5.2 Understanding when you need to apply the Transitional Rules
- 5.3 The 4 Transitional Transactions
- 5.4 The 4TT Checklist
- 5.4.1 The first transitional transaction – The transitional sale
- 5.4.2 The second transitional transaction – The transitional letting
- 5.4.3 The third transitional transaction – The transitional assignment
- 5.4.4 The fourth transitional transaction – The transitional surrender
- 5.5 A More Detailed Look at the Transitional Rules
- 5.6 What is a Transitional Interest?
- 5.6.1 The first definition – freeholds and freehold equivalents
- 5.6.2 The second definition – legacy leases and legacy lease reversions
- 5.7 The First Transitional Transaction – Transitional Sales
- 5.8 The Second Transitional Transaction – Transitional Lettings
- 5.8.1 What is a deductibility adjustment?
- 5.8.2 Differences between a transitional letting and a letting covered by the standard rules
- 5.8.3 The hidden costs of a deductibility adjustment
- 5.8.4 The entitlement to an additional VAT credit on selling or leasing the property after paying a deductibility adjustment
- 5.8.5 The impact of making a taxable letting after paying a deductibility adjustment
- 5.9 The Third and Fourth Transitional Transactions – Transitional Assignments & Transitional Surrenders
- 5.9.1 Is it a transitional assignment/surrender – The 20 year rule?
- 5.9.2 Is the transitional assignment/surrender taxable or exempt?
- 5.9.3 Calculating the VAT arising on the assignment or surrender
- Some Examples of Taxable Assignments
- 5.9.4 The VAT treatment of a premium paid for the assignment/surrender of a legacy lease
- 5.9.5 Opting to tax an exempt assignment or surrender
- 5.9.6 If you make a taxable assignment or surrender you may get an additional VAT repayment
- 5.10 Summary Check List for Assignments/Surrenders of a Transitional Interest
- 5.11 Reverse-Charge
- 5.12 The Document
- 5.13 CGS Implications for the Assignee/Landlord Arising from the Assignment/Surrender of a Legacy Lease
- 5.14 The Sale of a Property After the Surrender of a Transitional Lease
- 5.15 Lettings after the Surrender of a Transitional Lease
- 5.16 Use of a Property After the Surrender of a Transitional Interest
- 5.17 The Status of an Assigned Transitional Interest
- PART II – THE APPLICATION OF THE CGS TO TRANSITIONAL INTERESTS
- 5.18 To what Transitional Interests Does the CGS Apply?
- 5.19 Applying the CGS to Transitional Interests
- 5.20 The CGS Implications of Disposing of Your Transitional Interest
- 5.21 Amendments to the CGS so that it can apply to Transitional Interests
- 5.22 Transitional Interests Acquired After 1 July 2007
- PART III – THE ROLE OF SECTION 4 VAT ACT 1972 AFTER 1 JULY 2008
- 5.23 The Remains of Section 4 VAT Act 1972
- 5.24 Section 93(2) and the Sale of the Reversionary Interest
- 5.25 The Continuance of Section 93(3)
- 5.26 The Continuance of Section 95(8)(c)(d)(e)
- 5.27 The Relationship between Section 93 and 95(4)(b) & (8)(c) to (e) and Section 95
- Chapter 6 Registration, Recovery, Invoicing and Returns
- 6.1 Registration
- 6.2 Recovery
- 6.3 The VAT Invoicing Requirements on the Sale of an Ownership Interest or an opted letting
- 6.3.1 Governing legislation
- 6.3.2 Requirement to issue an invoice
- 6.3.3 What should be on a VAT invoice?
- 6.3.4 Time limit for issuing the invoice
- 6.4 For How Long do you Have to Hold on to VAT Records?
- 6.5 The Appropriate Return for VAT on the Sale of an Ownership Interest
- Chapter 7 Sales of Properties by Liquidators, Receivers and Mortgagees in Possession
- Chapter 8 The Impact of EU Law on Irish VAT on Property
- 8.1 Introduction
- 8.2 The Relationship between Irish and EU VAT Law
- 8.3 The Meaning of the Word “Letting” for VAT Purposes
- 8.3.1 The definition of “letting” given by the European court
- 8.3.2 Hotel sector or sector with a similar function – Blasi
- 8.3.3 Licences
- 8.4 CJEU decisions on the Non-Business use of Business Assets
- 8.5 Using a Property for both Business and Non-Business Purposes – The Practical Implications
- Appendix I Supply of Property (May 2022)
- Appendix II Letting of Immovable Goods (November 2022)
- Appendix III FAQs – VAT on Property (May 2008)
- Appendix IV Tax Briefing – Issue 69, September 2008
- Appendix V Revenue eBrief No. 40/09, 29 July 2009
- Appendix VI Tax Briefing – Issue 81, November 2009
- Appendix VII Tax Briefing – Issue 03, April 2010
- Appendix VIII Service Charges
- Appendix IX Note to VAT TALC
- Appendix X Tax Briefing, Issue number 10, 2010 VAT Treatment of “Forced Sales” and similar situations involving a Mortgagee in Possession or an Asset Receiver
- Appendix XI [Part 04-02] Disclosure of information to Mortgagees-in-Possession (MIPs), Asset Receivers and other Receivers to enable them to meet their obligations under Value-Added Tax legislation
- Appendix XII Transfer of Business (November 2023)
- Appendix XIII Revenue correspondence on the application of Transfer of Business relief – 2 April 2014