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5 2002

FINANCE ACT, 2002

PART 3

Value-Added Tax

Interpretation (Part 3).

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

Amendment of section 4 (special provisions in relation to the supply of immovable goods) of Principal Act.

99. —Section 4 of the Principal Act is amended by the insertion of the following subsection after subsection (3)—

“(3A)  (a) Where a person having an interest in immovable goods to which this section applies surrenders possession of those goods or of any part of them by means of a disposal of that interest or of an interest which derives from that interest, and where the value of the interest being disposed of is less than its economic value then for the purposes of this Act such disposal—

(i) shall be deemed not to be a supply of immovable goods for the purposes of subsection (2), but

(ii) shall be deemed to be a letting of immovable goods to which paragraph (iv) of the First Schedule applies.

(b) This subsection does not apply to the disposal of a freehold interest.

(c) Where a person establishes to the satisfaction of the Revenue Commissioners that the value of an interest in immovable goods being disposed of by such person is less than the economic value of those immovable goods because of an unforeseen change in market conditions affecting the value of that interest since such person acquired and developed those goods, then the Revenue Commissioners may determine that that disposal be treated as a supply of immovable goods for the purposes of subsection (2).

(d) For the purposes of this subsection—

‘economic value’, in relation to an interest in immovable goods being disposed of, means the amount on which tax was chargeable to the person disposing of that interest in respect of that person's acquisition of that interest and in respect of any development of those immovable goods by or on behalf of that person since that acquisition; but if—

(i) there was no development of those immovable goods by or on behalf of that person since that person's acquisition of that interest, and

(ii) that person disposes, including by way of surrender or assignment, of an interest (in this subsection referred to as a ‘lesser interest’) which is derived from the interest which that person acquired (in this subsection referred to as a ‘greater interest’), and

(iii) the lesser interest is an interest of not more than 35 years,

then the economic value of the lesser interest shall be deemed to be the amount calculated in accordance with the following formula:

E ×

N1

N2

where—

E is the economic value of the greater interest,

N1 is the number of full years in the lesser interest, and

N2 is the number of full years in the greater interest, but if the number of full years in the greater interest exceeds 35 or if the greater interest is a freehold interest then N2 shall be deemed to be equal to 35,

but where—

(I) the disposal of the lesser interest is not a disposal by way of surrender or assignment, and

(II) the amount so calculated is less than 75 per cent of the economic value of the greater interest,

then the economic value of the lesser interest shall be deemed to be 75 per cent of the economic value of the greater interest;

‘the value of an interest being disposed of’ means the amount on which tax would be chargeable in accordance with section 10 if that disposal were deemed to be a supply of immovable goods in accordance with subsection (2).”.

Amendment of section 7 (waiver of exemption) of Principal Act.

100. —Section 7 of the Principal Act is amended in subsection (1)—

(a) by renumbering that subsection as paragraph (a) of subsection (1), and

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

“(b) A waiver of exemption from tax under this subsection shall not apply or be extended to any disposal of an interest in immovable goods which is deemed to be a letting of immovable goods to which paragraph (iv) of the First Schedule applies by virtue of section 4(3A)(a)(ii).”.

Amendment of section 8 (taxable persons) of Principal Act.

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

(a) by adding in subsection (1) “, but a person not established in the State who supplies a service in the State in the circumstances set out in subsection (2)(aa) shall not be a taxable person and shall not be accountable for or liable to pay the tax chargeable in respect of such supply” after “in respect of such supply”,

(b) in subsection (2)—

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

“(aa) Where a person not established in the State supplies a cultural, artistic, entertainment or similar service in the State, then any person, other than a person acting in a private capacity, who receives that service shall-

(i) in relation to it, be a taxable person or be deemed to be a taxable person, and

(ii) be liable to pay the tax chargeable as if that taxable person had in fact supplied the service for consideration in the course or furtherance of business;

but where that service is commissioned or procured by a promoter, agent or other person not being a person acting in a private capacity, then that promoter, agent or person shall be deemed to be the person who receives the service.

(ab) Where the person who receives the services referred to in paragraph (aa) is a body that has received funding from the Arts Council in the 3 years prior to the passing of the Finance Act, 2002, the Revenue Commissioners may, at the request of such body, authorise the application of that paragraph in respect of such services received by that body to be deferred to a time not later than 1 March 2003.”,

and

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

“(d) (i) Where a person who owns, occupies or controls land (in this subsection referred to as a ‘premises provider’) allows, in the course or furtherance of business, a person not established in the State to supply goods for consideration in the course or furtherance of business (in this subsection referred to as a ‘mobile trader’) on that land for a period of less than seven consecutive days, then the premises provider shall, not later than fourteen days before the day when the mobile trader is allowed to supply goods on that land, furnish to the Revenue Commissioners, at the office of the Revenue Commissioners which would normally deal with the examination of the records kept by the premises provider in accordance with section 16, the following particulars—

(I) the name and address of the mobile trader,

(II) the dates on which the mobile trader intends to supply goods on the premises provider's land,

(III) the address of the land referred to in clause (II), and

(IV) any other information as may be specified in regulations.

(ii) Where a premises provider allows, in the course or furtherance of business, a promoter not established in the State to supply on the premises provider's land a cultural, artistic, entertainment or similar service which in accordance with section (2)(aa) is deemed to be supplied by that promoter, then the premises provider shall, not later than fourteen days before such service is scheduled to begin, furnish to the Revenue Commissioners, at the office of the Revenue Commissioners which would normally deal with the examination of the records kept by the premises provider in accordance with section 16, the following particulars—

(I) the name and address of the promoter,

(II) details, including the dates, duration and venue, of the event or performance commissioned or procured by the promoter in the provision of that service, and

(III) any other information as may be specified in regulations.

(iii) Where a premises provider fails to provide to the Revenue Commissioners true and correct particulars as required in accordance with subparagraph (i) or (ii), then the Revenue Commissioners may, where it appears necessary to them to do so for the protection of the revenue, make such premises provider jointly and severally liable with a mobile trader or promoter, as the case may be, for the tax chargeable in respect of supplies made by that mobile trader or promoter on the premises provider's land, and in those circumstances the Revenue Commissioners shall notify the premises provider in writing accordingly.

(iv) A premises provider who has been notified in accordance with subparagraph (iii) shall be deemed to be a taxable person and shall be liable to pay the tax referred to in that subparagraph as if it were tax due in accordance with section 19 by the premises provider for the taxable period within which the supplies are made by the mobile trader or promoter, but the premises provider shall not be liable to pay tax referred to in subparagraph (iii) which the Revenue Commissioners are satisfied was accounted for by a mobile trader or promoter.”,

and

(c) in subsection (8)—

(i) by adding in paragraph (a)(i) “and the persons so notified shall be regarded as being in a group for as long as this paragraph applies to them,” after “accordingly,”, and

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

“(d) Where a person in a group (in this subsection referred to as the ‘landlord’) having acquired an interest in, or developed, immovable goods to which section 4 applies, whether such acquisition or development occurred before or after the landlord became a person in the group, subsequently surrenders possession of those immovable goods, or any part of them, to another person in the group (in this subsection referred to as the ‘occupant’) where the surrender of possession if it were to a person not in the group would not constitute a supply of immovable goods in accordance with section 4, and either the landlord or the occupant subsequently ceases to be a person in the group (in this subsection referred to as a ‘cessation’) then, if that landlord does not have a waiver of his or her right to exemption from tax in accordance with section 7 still in effect at the time of the cessation—

(i) the surrender of possession, or

(ii) if that landlord surrendered possession of those immovable goods more than once to another person in the group, the first such surrender of possession,

shall be deemed to occur when that first such cessation takes place, but if such a landlord's waiver of his or her right to exemption from tax in accordance with section 7 has been cancelled before a surrender of possession of immovable goods to another person in the group ends, that surrender of possession shall be deemed to take place on the date of the said first such cessation.”.

Amendment of section 10 (amount on which tax is chargeable) of Principal Act.

102. —Section 10 of the Principal Act is amended—

(a) by substituting in subsection (6) “Subject to subsection (6A), where” for “Where”,

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

“(6A) Notwithstanding the provisions of subsection (6), where—

(a) a supplier—

(i) supplies a token, stamp, coupon or voucher, which has an amount stated on it, to a person who acquires it in the course or furtherance of business with a view to resale, and

(ii) promises to subsequently accept that token, stamp, coupon or voucher at its face value in full or part payment of the price of goods,

and

(b) a person who acquires that token, stamp, coupon or voucher, whether from the supplier referred to in paragraph (a) or from any other person in the course or furtherance of business, supplies it for consideration in the course or furtherance of business,

then in the case of each such supply the consideration received shall not be disregarded for the purposes of this Act and when such token, stamp, coupon or voucher is used in payment or part payment of the price of goods, the face value of it shall, for the purposes of section 10(2), be disregarded.”,

and

(c) in subsection (7)(c) by inserting “(6A) or” after “subject to subsection”.

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

103. —Section 11(1)(a) of the Principal Act is amended by substituting “21 per cent” for “20 per cent” (inserted by the Finance Act, 2001 ).

Amendment of section 12D (adjustment of tax deductible in certain circumstances) of Principal Act.

104. —Section 12D of the Principal Act is amended in subsection (4) by substituting “calculate an amount which shall be payable as if it were tax due by that person in accordance with section 19 for the taxable period within which the transfer was made, and that amount shall be calculated” for “reduce the amount of tax deductible by that person, for the purposes of section 12, for the period within which the transfer was made, by an amount calculated”.

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

105. —Section 13 of the Principal Act is amended in subsection (3)(b) by adding “other than services for which in accordance with section 8(2) the person who receives them is solely liable for the tax chargeable” after “in the State”.

Amendment of section 19 (tax due and payable) of Principal Act.

106. —Section 19 of the Principal Act is amended—

(a) in subsection (2) by inserting “However this subsection does not apply to the tax chargeable in respect of supplies of goods or services where tax is due in accordance with paragraph (a) or (b) of subsection (1) by a taxable person who is not authorised under section 14 to account for tax due by reference to the amount of the moneys received during a taxable period or part thereof.” after “at the time of such receipt.”, and

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

“(d) (i) A return required to be furnished by a taxable person under this subsection may be furnished by the taxable person or another person acting under the taxable person's authority for that purpose and a return purporting to be a return furnished by a person acting under a taxable person's authority shall be deemed to be a return furnished by the taxable person, unless the contrary is proved.

(ii) Where a return in accordance with paragraph (i) is furnished by a person acting under a taxable person's authority the provisions of any enactment relating to value-added tax shall apply as if it had been furnished by the taxable person.”.

Letter of expression of doubt.

107. —The Principal Act is amended by inserting the following section after section 19A—

“19B.—(1) (a) Where a taxable person is in doubt as to the correct application of any enactment relating to value-added tax (in this section referred to as ‘the law’) to a transaction which could give rise to a liability to tax by that person or affect that person's liability to tax or entitlement to a deduction or refund of tax, then that taxable person may, at the same time as the taxable person furnishes to the Collector-General the return due in accordance with section 19 for the period in which the transaction occurred, lodge a letter of expression of doubt with the Revenue Commissioners at the office of the Revenue Commissioners which would normally deal with the examination of the records kept by that person in accordance with section 16, but this section shall only apply if that return is furnished within the time limits prescribed in section 19.

(b) For the purposes of this section ‘letter of expression of doubt’ means a communication received in legible form which—

(i) sets out full details of the circumstances of the transaction and makes reference to the provisions of the law giving rise to the doubt,

(ii) identifies the amount of tax in doubt in respect of the taxable period to which the expression of doubt relates,

(iii) is accompanied by supporting documentation as relevant, and

(iv) is clearly identified as a letter of expression of doubt for the purposes of this section,

and reference to an expression of doubt shall be construed accordingly.

(2) Subject to subsection (3), where a return and a letter of expression of doubt relating to a transaction are furnished by a taxable person to the Revenue Commissioners in accordance with this section, the provisions of section 21 shall not apply to any additional liability arising from a notification to that person by the Revenue Commissioners of the correct application of the law to the said transaction, on condition that such additional liability is accounted for and remitted to the Collector-General by the taxable person as if it were tax due for the taxable period in which the notification is issued.

(3) Subsection (2) does not apply where the Revenue Commissioners do not accept as genuine an expression of doubt in respect of the application of the law to a transaction, and an expression of doubt shall not be accepted as genuine in particular where the Revenue Commissioners—

(a) have issued general guidelines concerning the application of the law in similar circumstances,

(b) are of the opinion that the matter is otherwise sufficiently free from doubt as not to warrant an expression of doubt, or

(c) are of the opinion that the taxable person was acting with a view to the evasion or avoidance of tax.

(4) Where the Revenue Commissioners do not accept an expression of doubt as genuine they shall notify the taxable person accordingly, and the taxable person shall account for any tax, which was not correctly accounted for in the return referred to in subsection (1), as tax due for the taxable period in which the transaction occurred, and the provisions of section 21 shall apply accordingly.

(5) A taxable person who is aggrieved by a decision of the Revenue Commissioners that that person's expression of doubt is not genuine may, by giving notice in writing to the Revenue Commissioners within the period of twenty-one days after the notification of the said decision, require the matter to be referred to the Appeal Commissioners.

(6) A letter of expression of doubt shall be deemed not to have been made unless its receipt is acknowledged by the Revenue Commissioners and that acknowledgement forms part of the records kept by the taxable person for the purposes of section 16.

(7) (a) For the purposes of this section ‘taxable person’ includes a person who is not a registered person and is in doubt as to whether he or she is a taxable person in respect of a transaction and in that case references to a return and records are to be construed as referring to a return that would be due under section 19 and records that would be kept for the purposes of section 16, if that person were in fact a taxable person.

(b) A person whose expression of doubt concerns whether he or she is a taxable person shall lodge that expression of doubt for the purposes of applying subsection (2) not later than the nineteenth day of the month following the taxable period in which the transaction giving rise to the expression of doubt occurred.”.

Amendment of section 21 (interest) of Principal Act.

108. —Section 21 of the Principal Act is amended by substituting the following subsection for subsection (1)—

“(1) (a) Where any amount of tax becomes payable under section 19(3) and is not paid, simple interest on the amount shall be paid by the taxable person, and such interest shall be calculated from the date on which the amount became payable and at a rate of 0.0322 per cent for each day or part of a day during which the amount remains unpaid.

(b) Where an amount of tax is refunded to a person and where—

(i) no amount of tax was properly refundable to that person under section 20(1), or

(ii) the amount of tax refunded is greater than the amount properly refundable to that person under section 20(1),

simple interest shall be paid by that person on any amount of tax refunded to that person which was not properly refundable to that person under section 20(1), from the date the refund was made, at the rate of 0.0322 per cent for each day or part of a day during which the person does not correctly account for any such amount refunded which was not properly refundable.”.

Amendment of section 25 (appeals) of Principal Act.

109. —Section 25 of the Principal Act is amended in subsection (1)—

(a) by deleting paragraph (ab), and

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

“(ae) the treatment of a person who allows supplies to be made on land owned, occupied or controlled by that person, as jointly and severally liable with another person, in accordance with section 8(2)(d),

(af) the application of section 4(3A)(c),”.

Amendment of First Schedule to Principal Act.

110. —The First Schedule to the Principal Act is amended by inserting the following after paragraph (xv):

“(xva) The acceptance of totalisator bets—

(a) by a person or a body of persons operating under a licence granted under the Totalisator Act, 1929 , or

(b) by a licensed bookmaker acting in accordance with the provisions of section 19A(a) of the Betting Act, 1931 (inserted by the Horse and Greyhound Racing Act, 2001);”.