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11 2007

Finance Act 2007

PART 3

Value-Added Tax

Interpretation (Part 3).

75 .— In this Part and in Schedule 3 “Principal Act” means the Value-Added Tax Act 1972 .

Amendment of section 3 (supply of goods) of Principal Act.

76 .— Section 3 of the Principal Act is amended with effect from 1 May 2007—

(a) in subsection (1)(a) by substituting “including” for “other than”,

(b) in subsection (5)—

(i) by inserting in paragraph (a) “by the person supplying financial services of the kind specified in subparagraph (i)(e) of the First Schedule as part of that contract” after “referred to in subsection (1)(b)”, and

(ii) in paragraph (c)—

(I) by deleting in subparagraph (i) “being goods which are of such a kind or were used in such circumstances that no part of the tax, if any, chargeable on that supply of those goods was deductible by the person to whom that supply was made,” and

(II) by substituting “shall be deemed for the purposes of this Act to be a supply of goods to which paragraph (xxiv) of the First Schedule does not apply” for “shall be deemed for the purposes of this Act not to be a supply of goods”.

Amendment of section 5 (supply of services) of Principal Act.

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

(a) by deleting paragraph (e)(iv), and

(b) with effect from 1 January 2008—

(i) by substituting the word “intermediary” for “agent” in paragraph (f)(iii) and in subparagraphs (i)(II) and (ii) of paragraph (g), and

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

“(gg) Subject to paragraph (f)(iii), the place of supply of services of an intermediary acting in the name and on behalf of another person, other than in cases where that intermediary takes part in the intra-Community transport of goods or in activities ancillary to the intra-Community transport of goods, is the place where the underlying transaction is supplied in accordance with this Act.”.

(2) Subsection (1)(a) comes into operation on such day as the Minister for Finance may by order appoint.

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

78 .— Section 7 of the Principal Act is amended by inserting the following after subsection (1):

“(1A) (a) Notwithstanding subsection (1)(a), a person shall not waive his or her right to exemption from tax on or after the date of passing of the Finance Act 2007 in respect of a letting of immovable goods to which paragraph (iv) of the First Schedule relates which is a letting of all or part of a house, apartment or other similar establishment, to the extent that those immovable goods are used or to be used for residential purposes, including any such letting—

(i) governed by the Residential Tenancies Act 2004 ,

(ii) governed by the Housing (Rent Books) Regulations 1993 (S.I. No. 146 of 1993),

(iii) governed by section 10 of the Housing Act 1988 ,

(iv) of a dwelling to which Part II of the Housing (Private Rented Dwellings) Act 1982 applies, or

(v) of accommodation which is provided as a temporary dwelling for emergency residential purposes,

and any waiver of exemption from tax which applies under this section shall not extend to such a letting of immovable goods where those goods are acquired or developed on or after the date of passing of the Finance Act 2007.

(b) For the purpose of applying paragraph (a), immovable goods are considered to be acquired when a person enters into a binding contract in writing for the acquisition of those goods or of an interest in those goods, or for the construction of those goods, and are considered to be developed when an application for planning permission in respect of the development of those goods as a house, apartment or other similar establishment is received by a planning authority.”.

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

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

(a) with effect from 1 March 2007—

(i) in subsections (3), (3A) and (9), by substituting “€35,000” for “€27,500” in each place it occurs, and

(ii) in subsection (3) by substituting “€70,000” for “€55,000” in each place it occurs,

and

(b) in subsection (8)—

(i) in paragraph (a)—

(I) by substituting “, established in the State and engaged in the supply of goods or services in the course or furtherance of business,” for “established in the State”,

(II) by substituting “for the purpose of this Act, the said Commissioners may, whether following an application on behalf of those persons or otherwise” for “subject to such conditions as they may impose by regulations, the said Commissioners, for the purposes of this Act, may”,

(III) by substituting the following subparagraph for subparagraph (i):

“(i) by notice in writing to each of those persons deem them to be a single taxable person, referred to in this section as a ‘group’ and the persons so notified shall then be regarded as being in the group for as long as this paragraph applies to them, but the provisions of section 9 shall apply in respect of each of the members of the group, and—

(I) one of those persons, who shall be notified accordingly by the Commissioners, shall be responsible for complying with the provisions of this Act in respect of the group, and

(II) all rights and obligations arising under this Act in respect of the transactions of the group shall be determined accordingly, and”,

and

(IV) in subparagraph (ii) by substituting “make each person in the group” for “make each such person”,

(ii) by deleting paragraph (c), and

(iii) by inserting the following after paragraph (d):

“(e) The Revenue Commissioners may make regulations as seem to them to be necessary for the purposes of this subsection.”.

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

80 .— Section 10 of the Principal Act is amended:

(a) in subsection (3)—

(i) by deleting paragraph (a), and

(ii) in paragraph (c) by substituting “subsection (3A)” for “paragraph (a)”,

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

“(3A) (a) The Revenue Commissioners may, where they consider it necessary or appropriate to do so to ensure the correct collection of the tax, make a determination that the amount on which tax is chargeable on a supply of goods or services is the open market value of that supply, if they are satisfied that the actual consideration in relation to that supply is—

(i) lower than the open market value of that supply where the recipient of that supply has no entitlement to deduct tax under section 12, or is not entitled to deduct all of the tax chargeable on that supply, or is a flat-rate farmer,

(ii) lower than the open market value of that supply, being an exempted activity, where the supplier engages in the course or furtherance of business in non-deductible supplies or activities as defined in section 12(4)(a), or is a flat-rate farmer, or

(iii) higher than the open market value where the supplier engages in the course or furtherance of business in non-deductible supplies or activities as defined in section 12(4)(a), or is a flat-rate farmer,

and that—

(I) the supplier and the recipient of that supply are persons connected by financial or legal ties, being persons who are party to any agreement, understanding, promise or undertaking whether express or implied and whether or not enforceable or intended to be enforceable by legal proceedings, or

(II) either the supplier or the recipient of that supply exercises control over the other and for this purpose ‘control’ has the meaning assigned to it by section 8(3B).

(b) A value determined in accordance with this subsection shall be deemed to be the true value of the supply to which it applies, for all the purposes of this Act.

(c) The Revenue Commissioners may make regulations as seem to them to be necessary for the purposes of this subsection.

(d) A determination under this section may be made by an inspector of taxes or such other officer as the Revenue Commissioners may authorise for the purpose.”,

and

(c) in subsection (10) by inserting the following after the definition of ‘open market price’:

“ ‘ open market value ’, in relation to a supply of goods or services, means the total consideration excluding tax that a customer, at a marketing stage which is the same as the stage at which the supply of the goods or services takes place, would reasonably be expected to pay to a supplier at arm’s length under conditions of fair competition for a comparable supply of such goods or services;

but if there is no such comparable supply of goods or services then ‘ open market value ’ means—

(a) in respect of a supply of goods, an amount that is not less than the purchase price of the goods or of similar goods or, in the absence of a purchase price, the cost price, determined at the time of supply,

(b) in respect of a supply of services, an amount that is not less than the full cost to the supplier of providing the service;”.

Amendment of section 10A (margin scheme goods) of Principal Act.

81 .— Section 10A(1) of the Principal Act is amended with effect from 1 May 2007 in the definition of “margin scheme goods” by substituting “section 3(5)(d)” for “paragraphs (c) and (d) of subsection (5) of section 3”.

Amendment of section 10B (special scheme for auctioneers) of Principal Act.

82 .— Section 10B of the Principal Act is amended with effect from 1 May 2007 by deleting paragraph (aa) of subsection (1).

Amendment of section 12 (deduction for tax borne or paid) of Principal Act.

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

(a) with effect from 1 May 2007 in subsection (1)(a) by deleting subparagraph (ia), and

(b) in subsection (3)—

(i) with effect from 1 July 2007 in paragraph (a) by substituting the following for subparagraph (i):

“(i) expenditure incurred by the taxable person on food or drink, or accommodation other than qualifying accommodation in connection with attendance at a qualifying conference as defined in paragraph (ca), or other personal services, for the taxable person, the taxable person’s agents or employees, except to the extent, if any, that such expenditure is incurred in relation to a supply of services in respect of which that taxable person is accountable for tax,”,

(ii) with effect from 1 May 2007 in paragraph (a)(iii) by inserting “or for the purpose of the supply thereof by a person supplying financial services of the kind specified in subparagraph (i)(e) of the First Schedule in respect of those motor vehicles as part of an agreement of the kind referred to in section 3(1)(b)” after “stock-in-trade”, and

(iii) with effect from 1 July 2007 by inserting the following paragraph after paragraph (c):

“(ca) For the purposes of subparagraph (a)(i)—

‘ delegate ’ means a taxable person or a taxable person’s employee or agent who attends a qualifying conference in the course or furtherance of that taxable person’s business;

‘ qualifying accommodation ’ means the supply to a delegate of a service consisting of the letting of immovable goods or accommodation covered by paragraph (xiii) of the Sixth Schedule, for a maximum period starting from the night prior to the date on which the qualifying conference commences and ending on the date on which the conference concludes;

‘ qualifying conferenc e’ means a conference or meeting in the course or furtherance of business organised to cater for 50 or more delegates, which takes place on or after 1 July 2007 at a venue designed and constructed for the purposes of hosting 50 or more delegates and in respect of which the person responsible for organising the conference issues in writing the details of the conference to each taxable person who attends or sends a delegate, and such details shall include—

(i) the location and dates of the conference,

(ii) the nature of the business being conducted,

(iii) the number of delegates for whom the conference is organised, and

(iv) the name, business address and VAT registration number of the person responsible for organising the conference.”.

Amendment of section 12A (special provisions for tax invoiced by flat-rate farmers) of Principal Act.

84 .— With effect from 1 January 2007, section 12A of the Principal Act is amended in subsection (1) by substituting “5.2 per cent” for “4.8 per cent”.

Amendment of section 12B (special scheme for means of transport supplied by taxable dealers) of Principal Act.

85 .— Section 12B of the Principal Act is amended with effect from 1 May 2007 in subsection (2)(aa) by substituting “section 3(5)(d)” for “paragraphs (c) and (d) of subsection (5) of section 3”.

Amendment of section 12C (special scheme for agricultural machinery) of Principal Act.

86 .— Section 12C of the Principal Act is amended in subsections (1A) and (1B) by substituting “section 3(5)(d)” for “section 3(5)(c) or (d)” wherever it occurs.

Amendment of section 14 (determination of tax due by reference to cash receipts) of Principal Act.

87 .— Section 14 of the Principal Act is amended with effect from 1 March 2007 in subsection (1) by substituting the following paragraph for paragraph (b):

“(b) the total consideration which such person is entitled to receive in respect of such person’s taxable supplies has not exceeded and is not likely to exceed €1,000,000 in any continuous period of 12 months,”.

Amendment of section 15B (goods in transit (additional provisions)) of Principal Act.

88 .— With effect from 1 January 2007, section 15B is amended—

(a) in subsection (5A)—

(i) by substituting “the Slovak Republic,” for “the Slovak Republic, or” in subparagraph (ii), and

(ii) by inserting the following after subparagraph (ii):

“(iia) the date of the first use of the means of transport was before 1 January 1999 in the case of means of transport entering the State from the Republic of Bulgaria or Romania, or”,

and

(b) in the definition of ‘date of accession’ in subsection (7)(a) by inserting “or 1 January 2007 in respect of the Republic of Bulgaria and Romania” after “Slovak Republic”.

Amendment of section 16 (duty to keep records) of Principal Act.

89 .— Section 16 of the Principal Act is amended by inserting the following subsection after subsection (2):

“(2A) (a) A taxable person who claims a deduction of tax pursuant to section 12 in respect of qualifying accommodation as defined in section 12(3)(ca) shall retain full and true records in relation to the attendance by the delegate at the relevant qualifying conference, including the details referred to in section 12(3)(ca) issued to that taxable person by the person responsible for organising that conference.

(b) A person responsible for organising a qualifying conference as defined in section 12(3)(ca) and to which section 12(3)(a)(i) relates shall keep full and true records of each such conference organised by that person.”.

Amendment of section 17 (invoices) of Principal Act.

90 .— Section 17 of the Principal Act is amended with effect from 1 May 2007—

(a) in subsection (1) by deleting the proviso to that subsection,

(b) by deleting subsections (1AA), (3AB), (5A) and (7A), and

(c) in subsection (1AB) by substituting “for the purposes of subsection (1AAA)” for “for the purposes of subsections (1AA), (1AAA)”.

Amendment of section 25 (appeals) of Principal Act.

91 .— Section 25 of the Principal Act is amended—

(a) in subsection (1)(ac) by inserting “or 10(3A)” after “section 8(3E)”, and

(b) in subsection (2) by deleting paragraph (i).

Amendment of section 32 (regulations) of Principal Act.

92 .— Section 32 of the Principal Act is amended in subsection (1) by inserting the following paragraph after paragraph (xxx):

“(xxxx) the making of a determination under section 10(3A);”.

Amendment of First Schedule to Principal Act.

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

“(va) services closely related to medical care covered by section 61 or 61A of the Health Act 1970 which are undertaken by or on behalf of the Health Service Executive or by home care providers duly recognised by that Executive under section 61A of that Act;”.

Amendment of Second Schedule to Principal Act.

94 .— Second Schedule to the Principal Act is amended:

(a) by inserting the following after subparagraph (iiib):

“(iiic) the supply of goods or services to international bodies recognised as such by the public authorities of the host Member State, and to members of such bodies, within the limits and under the conditions laid down by the international conventions establishing the bodies or by the agreements between the headquarters of those bodies and the host Member State of the headquarters;”,

(b) in paragraph (v) by substituting “maintenance, chartering and hiring” for “maintenance and hiring”, and

(c) in subparagraph (b) of paragraph (xii) by substituting “drinking water, juice extracted from, and other drinkable products derived from, fruit or vegetables,” for “including water”.

Amendment of Fourth Schedule to Principal Act.

95 .— The Fourth Schedule to the Principal Act is amended, with effect from 1 January 2008, by substituting “intermediaries” for “agents” in paragraph (vii).

Amendment of Sixth Schedule to Principal Act.

96 .— The Sixth Schedule to the Principal Act is amended—

(a) with effect from 1 March 2007 by substituting “€35,000” for “€27,500”, in paragraphs (viib) and (viic), and

(b) with effect from 1 July 2007, by inserting the following after paragraph (xv):

“(xva) children’s car safety seats,”.

Miscellaneous amendments relating to Council Directive 2006/112/EC.

97 .— With effect from 1 January 2007 in each provision of the Principal Act specified in the first column of Schedule 3 for the words set out in the second column of that Schedule at that entry there is substituted the words set out at the corresponding entry in the third column of that Schedule.

Revocation, etc. (Part 3).

98 .— The European Communities (Value-Added Tax) Regulations 2006 (S.I. No. 663 of 2006) shall, with effect from 1 January 2007, be deemed never to have had effect and are revoked.