PART 3

Value-Added Tax

104. —In this Part—

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

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

“the Act of 1997” means the Finance Act, 1997 .

105. — Section 3 of the Principal Act is hereby amended in subsection (1) by the substitution of the following paragraph for paragraph (f)—

“(f) the appropriation of goods by a taxable person for any purpose other than the purpose of his business or the disposal of goods free of charge by a taxable person where—

(i) tax chargeable in relation to those goods—

(I) upon their purchase, intra-Community acquisition or importation by the taxable person, or

(II) upon their development, construction, assembly, manufacture, production, extraction or application under paragraph (e),

as the case may be, was wholly or partially deductible under section 12, or

(ii) the ownership of those goods was transferred to the taxable person in the course of a transfer of a business or part thereof and that transfer of ownership was deemed not to be a supply of goods in accordance with subsection (5)(b), and”.

106. — Section 4 of the Principal Act is hereby amended by the insertion of the following subsections after subsection (8) (inserted by the Act of 1997):

“(9) Where a disposal of an interest in immovable goods is chargeable to tax and where those goods have not been developed since the date of the disposal of that interest (hereafter referred to in this subsection as ‘the taxable interest’) any disposal of an interest in those goods after that date by a person other than the person who acquired the taxable interest shall, for the purposes of this Act, be deemed to be a supply of immovable goods to which subsection (6) applies.

(10) (a) Where a disposal of an interest in immovable goods is chargeable to tax and the person who acquires that interest is obliged to pay rent to another person (hereafter referred to in this subsection as ‘the landlord’) under the terms and conditions laid down in respect of that interest, the landlord—

(i) shall, notwithstanding the provisions of section 8, be deemed not to be a taxable person in respect of transactions in relation to those immovable goods other than—

(I) supplies of those immovable goods on which tax is chargeable in accordance with the provisions of this section, or

(II) supplies of other goods or services effected for consideration by the landlord, or

(III) post-letting expenses in respect of that interest,

(ii) shall not be entitled to deduct tax in respect of transactions in relation to those immovable goods other than—

(I) supplies of those immovable goods on which tax is chargeable in accordance with the provisions of this section other than subsection (4), or

(II) supplies of other goods or services effected for consideration by the landlord, or

(III) post-letting expenses in respect of that interest,

(iii) shall be deemed, where that landlord is not the person who made the disposal of the interest, to be a taxable person in respect of post-letting expenses in relation to that interest and shall in relation to those post-letting expenses be entitled to deduct tax, in accordance with section 12, as if those post-letting expenses were for the purposes of the landlord's taxable supplies.

(b) For the purposes of this subsection post-letting expenses in relation to an interest in immovable goods are expenses which the landlord incurs—

(i) in carrying out services which the landlord is obliged to carry out under the terms and conditions of the written contract entered into on the disposal of the interest which was chargeable to tax but does not include transactions the obligation to perform which is not reflected in the consideration on which tax was charged on the disposal of that interest, or

(ii) which directly relate to the collection of rent arising under the contract referred to in subparagraph (i), or

(iii) which directly relate to a review of rent where the terms and conditions of the contract referred to in subparagraph (i) provide for such a review, or

(iv) which directly relate to the exercise of an option to extend the interest or to exercise a break–clause in relation to that interest where the terms and conditions of the contract referred to in subparagraph (i) provide for such an option or such a break-clause,

but do not include any expenses relating to goods or services of the type specified in section 12(3).”.

107. — Section 5 of the Principal Act is hereby amended—

(a) in subsection (6)—

(i) by the insertion in paragraph (dd) (inserted by the Act of 1997) after “a telecommunications service” of “, or a telephone card as defined in subsection (6A),”,

(ii) by the insertion of the following paragraph after paragraph (dd):

“(ddd) The place of supply of a telecommunications service or of a telephone card as defined in subsection (6A) shall be deemed, for the purposes of this Act, to be the State when that service is supplied by a taxable person from an establishment in the State and it is received, otherwise than for a business purpose, by a person whose usual place of residence is situated outside the Community, and it is effectively used and enjoyed in the State.”,

(iii) by the insertion in paragraph (e) (inserted by the Finance Act, 1986 ) after “specified in the Fourth Schedule” of “with the exception of the supply of services referred to in paragraphs (ddd) and (ee) in the circumstances specified in those paragraphs respectively and”, and

(iv) by the insertion of the following paragraph after paragraph (e):

“(ee) The place of supply of services of the description specified in paragraph (v) of the Fourth Schedule shall be deemed, for the purposes of this Act, to be the State, when those services are supplied by a person in the course or furtherance of business established in the State and they are received, otherwise than for a business purpose, by a person whose usual place of residence is situated outside the Community, and they are effectively used and enjoyed in the State.”,

and

(b) by the insertion of the following subsection after subsection (6):

“(6A) (a) Subject to paragraph (b), where the supply of a telephone card is taxable within the State and that telephone card is subsequently used outside the Community for the purpose of accessing a telecommunications service, the place of supply of that telecommunications service shall be deemed to be outside the Community and the supplier of that telephone card shall be entitled, in the taxable period within which that supplier acquires proof that that telephone card was so used outside the Community, to a reduction of the tax payable by that supplier in respect of the supply of that telephone card, by an amount calculated in accordance with paragraph (c).

(b) Where the supply of a telephone card is taxable in the State and the person liable for the tax on that supply is a person referred to in section 8(2)(a) who—

(i) is not entitled to a deduction, in accordance with section 12, of all of the tax chargeable in respect of that supply, or

(ii) is entitled to a deduction, in accordance with section 12, of the tax chargeable in respect of that supply because that card was acquired for the purposes of resale,

and that telephone card is subsequently used outside the Community for the purpose of accessing a telecommunications service, the place of supply of that telecommunications service shall be deemed to be outside the Community and the person who is taxable in respect of that supply of that telephone card shall be entitled, in the taxable period within which that person acquires proof that that telephone card was so used outside the Community, to a reduction of the tax payable in respect of that supply of that telephone card to the extent that that telephone card was so used.

(c) For the purposes of this subsection the amount of the reduction referred to in paragraph (a) shall be calculated as follows:

where—

A equals the tax inclusive price charged by the supplier for that part of the right contained in the telephone card which was consumed in accessing the telecommunications service which was deemed to be supplied outside the Community,

B equals the tax inclusive price charged to the supplier for that part of the right contained in the telephone card which was consumed in accessing the telecommunications service which was deemed to be supplied outside the Community, and

C is the percentage rate of tax chargeable on the supply of the telephone card at the time of that supply by that supplier.

(d) Where a telephone card is used to access a telecommunications service, the value of the telephone card so used shall, for the purposes of section 10(2), be disregarded.

(e) In this subsection ‘telephone card’ means a card or a means other than money which confers a right to access a telecommunications service and for which, when the card or other means is supplied to a person other than for the purposes of resale, the supplier is entitled to a consideration in respect of the supply and for which the user of that card or other means is not liable for any further charge in respect of the receipt of the telecommunications service accessed by means of that card or other means.”.

108. — Section 8 of the Principal Act is hereby amended in subsection (3)—

(a) in paragraph (a):

(i) by the insertion of the following subparagraph after subparagraph (i):

“(ia) goods being livestock semen, the total consideration has not exceeded and is not likely to exceed £40,000 and, in calculating that total consideration, supplies of livestock semen to—

(I) any other farmer licensed as an artificial insemination centre in accordance with the provisions of the Live Stock (Artificial Insemination) Act, 1947 , or

(II) a taxable person over whom that farmer exercises control,

shall be disregarded, or”,

(ii) by the substitution in subparagraph (iii) (inserted by the Act of 1997) of “services specified in subparagraph (i) and either or both of goods of the type specified in subparagraph (ia) and goods of the type specified in subparagraph (ii) supplied in the circumstances set out in that subparagraph” for “services and goods specified in subparagraph (i) and (ii)”,

(iii) by the insertion of “or” at the end of subparagraph (iii), and

(iv) by the insertion of the following after subparagraph (iii):

“(iv) goods of the type specified in subparagraph (ia) and goods of the type specified in subparagraph (ii) supplied in the circumstances set out in that subparagraph, the total consideration has not exceeded and is not likely to exceed £40,000,”,

(b) in subparagraph (ia) (inserted by the Act of 1997) of the proviso thereto by the insertion after “paragraph (a)(i)” of “, (a)(ia)”.

109. — Section 10 of the Principal Act is hereby amended in subsection (6) by the insertion after “goods or services” of “, other than telecommunications services,”.

110. — Section 11 of the Principal Act is hereby amended in subsection (1) (inserted by the Act of 1992) by the substitution in paragraph (f) of “3.6 per cent” for “3.3 per cent.” (inserted by the Act of 1997).

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

(a) by the insertion in subsection (1)(b)(iii) after “outside the State” of “, other than services consisting of the hiring out of motor vehicles (as defined in subsection (3)(b)) for utilisation in the State,”, and

(b) by the substitution in subsection (2) of “sections 20(1A) and 20(5)” for “section 20(1A)”.

112. —Section 12A (inserted by the Value-Added Tax (Amendment) Act, 1978 ) of the Principal Act is hereby amended in subsection (1) by the substitution of “3.6 per cent” for “3.3 per cent.” (inserted by the Act of 1997).

113. — Section 13 of the Principal Act is hereby amended in subsection (3)(c) by the substitution of “or in respect of motor vehicles (as defined in section 12(3)(b))” for “or in respect of means of transport”.

114. — Section 20 of the Principal Act is hereby amended—

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

“(4) (a) In relation to any taxable period ending before the 1st day of May, 1998, no refund shall, subject to paragraph (b), be made under this section or any other provision of this Act or regulations unless a claim for that refund is made within the period of ten years from the end of the taxable period to which the claim relates.

(b) In relation to any taxable period commencing on or after the 1st day of May, 1998, and on or after the 1st day of May, 1999, in relation to any other taxable period, no refund shall be made under this section or under any other provision of this Act or regulations unless a claim for that refund is made within the period of six years from the end of the taxable period to which that claim relates.”,

and

(b) by the substitution of the following subsection for subsection (5) (inserted by the Act of 1992):

“(5)(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 accounts for an amount of tax for which that person was not properly accountable, hereafter referred to in this subsection 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.

(b) Unjust enrichment of the claimant for the purposes of this section means the refund to a claimant of an overpaid amount or any part of an overpaid amount in circumstances where the cost of such overpaid amount or part thereof was, for practical purposes, passed on by the claimant to other persons in the price charged by the claimant for goods or services supplied by the claimant.

(c) Where, in relation to any claim under paragraph (a), the Revenue Commissioners have withheld an amount of the overpaid amount claimed under paragraph (a) as it would result in the unjust enrichment of the claimant the Revenue Commissioners shall, notwithstanding the provisions of paragraph (a), refund to the claimant out of the amount withheld, the amount quantified at paragraph (d)(iii) which would appropriately compensate the claimant for any loss of profits due to the mistaken assumption made in the operation of the tax, where the Revenue Commissioners are satisfied that the conditions in paragraph (d) have been met.

(d) The conditions referred to in paragraph (c), are that the claimant must—

(i) establish, based on an economic analysis which takes into account the price elasticity of demand of the goods or services supplied by the claimant, that the claimant's business has suffered a loss of turnover due to the mistaken assumption made in the operation of the tax,

(ii) quantify the extent of that loss,

(iii) quantify the extent of the claimant's loss of profits due to that loss of turnover.

(e) Where, in relation to any claim under paragraph (a), the Revenue Commissioners have withheld an amount of the overpaid amount claimed under paragraph (a) as it would result in the unjust enrichment of the claimant the Revenue Commissioners shall, notwithstanding the provisions of paragraph (a), refund to the claimant that part of the withheld amount which the claimant has undertaken to repay to the persons to whom the cost of the overpaid amount was passed on where they are satisfied that the claimant has adequate arrangements in place to identify and repay those persons.

(f) Where a claimant receives a refund in accordance with paragraph (e) and fails to repay the persons concerned at the latest by the thirtieth day next following the payment by the Revenue Commissioners of that refund, then any amount not so repaid shall, for the purposes of this Act, be treated as if it were tax due by the claimant for the taxable period within which that day falls.”.

115. — Section 30 of the Principal Act is hereby amended in subsection (4) by the substitution of the following paragraphs for paragraph (a):

“(a) (i) In relation to any taxable period ending before the 1st day of May, 1998, an estimation or assessment of tax under section 22 or 23 may, subject to subparagraph (ii), be made at any time not later than ten years after the end of the taxable period to which the estimate or assessment relates or, where the period in respect of which the estimate or assessment is made consists of two or more taxable periods, after the end of the earlier or earliest taxable period comprised in such period.

(ii) In relation to any taxable period commencing on or after the 1st day of May, 1998, and on or after the 1st day of May, 1999, in relation to any other taxable period, an estimation or assessment of tax under section 22 or 23 may be made at any time not later than six years after the end of the taxable period to which the estimate or assessment relates or, where the period in respect of which the estimate or assessment is made consists of two or more taxable periods, after the end of the earlier or earliest taxable period comprised in such period.

(aa) Notwithstanding paragraphs (a)(i) and (a)(ii) in a case in which any form of fraud or neglect has been committed by or on behalf of any person in connection with or in relation to tax, an estimate or assessment as aforesaid may be made at any time for any period for which, by reason of the fraud or neglect, tax would otherwise be lost to the Exchequer.”.

116. —The Second Schedule to the Principal Act is hereby amended—

(a) by the insertion of the following paragraph after paragraph (vb) (inserted by the Finance Act, 1993 ):

“(vc) the supply of navigation services by the Irish Aviation Authority to meet the needs of aircraft used by a transport undertaking operating for reward chiefly on international routes;”,

and

(b) by the substitution of the following paragraph for paragraph (xva) (inserted by the Finance Act, 1982 ):

“(xva) printed books and booklets including atlases but excluding—

(a) newspapers, periodicals, brochures, catalogues and programmes,

(b) books of stationery, cheque books and the like,

(c) diaries, organisers, yearbooks, planners and the like the total area of whose pages consist of 25 per cent or more of blank spaces for the recording of information,

(d) albums and the like, and

(e) books of stamps, of tickets or of coupons.”.

117. —The Sixth Schedule (inserted by the Act of 1992) to the Principal Act is hereby amended—

(a) by the insertion of the following paragraphs after paragraph (xia) (inserted by the Act of 1997):

“(xib) animal insemination services;

(xic) livestock semen;

(xid) live poultry and live ostriches;”,

and

(b) by the substitution of the following paragraph for paragraph (xii):

“(xii) printed matter consisting of:

(a) newspapers and periodicals;

(b) brochures, leaflets and programmes;

(c) catalogues, including directories, and similar printed matter;

(d) maps, hydrographic and similar charts;

(e) printed music other than in book or booklet form;

but excluding:

(i) other printed matter wholly or substantially devoted to advertising,

(ii) the goods specified in subparagraphs (b) to (e) of paragraph (xva) of the Second Schedule, and

(iii) any other printed matter;”.