PART 3

Value-Added Tax

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

68 .— Section 3 of the Principal Act is amended in subsection (1C)—

(a) in paragraph (a), by substituting “immovable goods.” for “immovable goods, and” and

(b) by deleting paragraph (b).

69 .— Section 7A of the Principal Act is amended—

(a) in subsection (1)(d)(iv)—

(i) by inserting “the landlord or” after “when”, and

(ii) by substituting “occupies” for “commences to occupy”,

and

(b) in subsection (2)—

(i) in paragraph (a) by substituting the following for subparagraph (ii):

“(ii) where the landlord, whether or not connected to the tenant, or a person connected to the landlord, occupies the immovable goods that is subject to that letting whether that landlord or that person occupies those goods by way of letting or otherwise.”,

and

(ii) to insert the following after paragraph (b):

“(c) Paragraph (a)(ii) and subsection (1)(d)(iv) shall not apply where the occupant (being any person including the landlord referred to in that paragraph or that subsection) uses the immovable goods which are the subject of the letting for the purpose of making supplies which entitle that occupant to deduct, in accordance with section 12, at least 90 per cent of all tax chargeable in respect of goods or services used by that occupant for the purpose of making those supplies. However, where a landlord has exercised a landlord’s option to tax in respect of a letting to which paragraph (a)(ii) would have applied but for this paragraph, paragraph (a)(ii) shall apply from the end of the first accounting year in which the immovable goods are used for the purpose of making supplies which entitle that occupant to deduct less than 90 per cent of the said tax chargeable.”.

70 .— Section 7B of the Principal Act is amended by inserting the following after subsection (5)—

“(6) Where a landlord has a letting to which subsection (3) or (4) applies and that landlord becomes a person in a group within the meaning of section 8(8) on or after 1 July 2008 and the person to whom that letting is made is a person in that group, then the person referred to in section 8(8)(a)(i)(I) in respect of that group shall be liable to pay the amount as specified in subsection (3)(a) as if it were tax due in accordance with section 19—

(a) in the case of a landlord who became a person in that group before the date of passing of the Finance (No. 2) Act 2008, in the taxable period in which that Act is passed, or

(b) in the case of a landlord who became a person in that group after the date of passing of the Finance (No. 2) Act 2008, in the taxable period during which that landlord became a person in that group.”.

71 .— The Principal Act is amended with effect from 1 January 2010 by inserting the following after section 10B:

“10C.— (1) In this section—

‘ bought-in services ’ means goods or services which a travel agent purchases for the direct benefit of a traveller from another taxable person or from a person engaged in business outside the State;

‘ margin scheme services ’ means bought-in services supplied by a travel agent to a traveller;

‘ travel agent ’ means a taxable person who acts as a principal in the supply to a traveller of margin scheme services, and for the purposes of this section travel agent includes tour operator;

‘ travel agent’s margin ’, in relation to a supply of margin scheme services, means an amount which is calculated in accordance with the following formula:

A — B

where—

A is the total consideration which the travel agent becomes entitled to receive in respect of or in relation to that supply of margin scheme services including all taxes, commissions, costs and charges whatsoever and value-added tax payable in respect of that supply, and

B is the amount payable by the travel agent to a supplier in respect of bought-in services included in that supply of margin scheme services to the traveller, but any bought-in services purchased by the travel agent prior to 1 January 2010 in respect of which that travel agent claims deductibility in accordance with section 12 shall be disregarded in calculating the margin,

and if that B is greater than that A the travel agent’s margin in respect of that supply shall be deemed to be nil;

‘ travel agent’s margin scheme ’ means the special arrangements for the taxation of margin scheme services.

(2) A supply of margin scheme services by a travel agent to a traveller in respect of a journey shall be treated as a single supply.

(3) The place of supply of margin scheme services is the place where a travel agent has established that travel agent’s business, but if those services are provided from a fixed establishment of that travel agent located in a place other than the place where that travel agent has established that travel agent’s business, the place of supply of those services is the place where that fixed establishment is located.

(4) The travel agent’s margin scheme shall apply to the supply of margin scheme services in the State.

(5) Notwithstanding section 10, the amount on which tax is chargeable by virtue of section 2(1)(a) on a supply of margin scheme services shall be the travel agent’s margin less the amount of tax included in that margin.

(6) Notwithstanding sections 12 and 13, a travel agent shall not be entitled to a deduction or a refund of tax borne or paid in respect of bought-in services supplied by that travel agent as margin scheme services.

(7) Where a travel agent supplies margin scheme services together with other goods or services to a traveller for a total consideration, then that total consideration shall be apportioned by that travel agent so as to correctly reflect the ratio which the value of those margin scheme services bears to that total consideration, and in that case the proportion of the total consideration relating to the value of the margin scheme services shall be subject to the travel agent’s margin scheme.

(8) Margin scheme services shall be treated as intermediary services when the bought-in services are performed outside the Community.

(9) Where a travel agent makes a supply of margin scheme services that includes some services that are treated as intermediary services in accordance with subsection (8), then the total travel agent’s margin in respect of that supply shall be apportioned by that travel agent so as to correctly reflect the ratio which the cost to that travel agent of the bought-in services used in the margin scheme services that are treated as intermediary services in that supply bears to the total cost to that travel agent of all bought-in services used in making that supply of margin scheme services.

(10) A travel agent being an accountable person who supplies margin scheme services shall include the tax due on that person’s supplies of margin scheme services for a taxable period in the return that that person is required to furnish in accordance with section 19(3).

(11) The Revenue Commissioners may make such regulations as they consider necessary for the purposes of the operation of this section including provisions for simplified accounting arrangements.”.

72 .— Section 11 of the Principal Act is amended with effect from 1 December 2008 in subsection (1)(a) by substituting “21.5 per cent” for “21 per cent”.

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

(a) in subsection (1)—

(i) in paragraph (a) by deleting “and” in subparagraph (vii), and by substituting “section 12A, and” for “section 12A.” in subparagraph (viii),

(ii) by inserting the following after subparagraph (viii) of paragraph (a):

“(ix) subject to subsection (4) and regulations (if any), 20 per cent of the tax charged to that accountable person in respect of the purchase, hiring, intra-Community acquisition or importation of a qualifying vehicle (within the meaning assigned by paragraph (c)), where that vehicle is used primarily for business purposes, being at least 60 per cent of the use to which that vehicle is put, and where that accountable person subsequently disposes of that vehicle the tax deducted by that person in accordance with this subsection shall be treated as if it was not deductible by that person for the purposes of paragraph (xxiv)(c) of the First Schedule:”,

and

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

“(c) For the purposes of paragraph (a)(ix) and subsection (4)(ba), a ‘qualifying vehicle’ means a motor vehicle which, for the purposes of vehicle registration tax is first registered, in accordance with section 131 of Finance Act 1992, on or after 1 January 2009 and has, for the purposes of that registration, a level of CO ₂ emissions of less than 156g/km.”,

(b) in subsection (3)(a)(iii) by inserting “subject to subsection (1)(a)(ix)” before “the purchase”,

(c) in subsection (4) by inserting the following after paragraph (b):

“(ba) For the purposes of this subsection, the reference in paragraph (b) to ‘tax, borne or payable’ shall, in the case of an acquisition of a qualifying vehicle (within the meaning assigned by subsection (1)(c)) be deemed to be a reference to ‘20 per cent of the tax, borne or payable’.”,

and

(d) by inserting the following after subsection (4):

“(4A) (a) Where an accountable person deducts tax in relation to the purchase, intra-Community acquisition or importation of a qualifying vehicle in accordance with subsection (1)(a)(ix) and that person disposes of that qualifying vehicle within 2 years of that purchase, acquisition or importation, then that person shall be obliged to reduce the amount of the tax deductible by that person for the taxable period in which the vehicle is disposed of by an amount calculated in accordance with the following formula:

TD x (4-N)

4

where—

TD is the amount of tax deducted by that accountable person on the purchase, acquisition or importation of that vehicle, and

N is a number that is equal to the number of days from the date of purchase, acquisition or importation of the vehicle by that accountable person to the date of disposal by that person, divided by 182 and rounded down to the nearest whole number,

but if that N is greater than 4 then N shall be 4.

(b) Where an accountable person deducts tax in relation to the purchase, intra-Community acquisition or importation of a qualifying vehicle in accordance with subsection (1)(a)(ix) and the vehicle is subsequently used for less than 60 per cent business purposes in a taxable period, then that person is obliged to reduce the amount of tax deductible by that person for that taxable period by an amount calculated in accordance with the following formula:

TD x (4-N)

4

where—

TD is the amount of tax deducted by that accountable person on the purchase, acquisition or importation of that vehicle, and

N is a number that is equal to the number of days from the date of purchase, acquisition or importation of the vehicle by that accountable person to the first day of the taxable period in which the vehicle is used for less than 60 per cent business purposes, divided by 182 and rounded down to the nearest whole number,

but if that N is greater than 4 then N shall be 4.”.

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

(a) in subsection (5)(a) by substituting “unless they determine that the refund of that overpaid amount or part thereof would result in the unjust enrichment of the claimant” for “unless that refund would result in the unjust enrichment of the claimant”, and

(b) by substituting the following for paragraphs (b), (c) and (d) of subsection (5):

“(b) A person who claims a refund of an overpaid amount under this subsection shall make that claim in writing setting out full details of the circumstances of the case and identifying the overpaid amount in respect of each taxable period to which the claim relates. The claimant shall furnish such relevant documentation to support the claim as the Revenue Commissioners may request.

(c) (i) For the purposes of determining whether a refund of an overpaid amount or part thereof would result in the unjust enrichment of a claimant, the Revenue Commissioners shall have regard to—

(I) the extent to which the cost of the overpaid amount was, for practical purposes, passed on by the claimant to other persons in the price charged by that claimant for goods or services supplied by that claimant,

(II) any net loss of profits which they have reason to believe, based on their own analysis and on any information that may be provided to them by the claimant, was borne by the claimant due to the mistaken assumption made in the operation of the tax, and

(III) any other factors that the claimant brings to their attention in this context.

(ii) The Revenue Commissioners may request from the claimant all reasonable information relating to the circumstances giving rise to the claim as may assist them in reaching a determination for the purposes of subparagraph (i).

(d) Where, in accordance with paragraph (c), the Revenue Commissioners determine that a refund of an overpaid amount or part thereof would result in the unjust enrichment of a claimant, they shall refund only so much of the overpaid amount as would not result in the unjust enrichment of that claimant.”.

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

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

“(dca) the manner in which the travel agent’s margin scheme referred to in section 10C shall operate;”,

and

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

“(dda) the manner in which the deduction entitlement referred to in section 12(1)(a)(ix) may be calculated;”.

76 .— The First Schedule to the Principal Act is amended with effect from 1 January 2010 by deleting subparagraph (a) of paragraph (ix).

77 .— The Second Schedule to the Principal Act is amended—

(a) with effect from 1 January 2010 by inserting the following after paragraph (vib):

“(vic) services which are treated as intermediary services in accordance with section 10C(8);”,

and

(b) in paragraph (xii)—

(i) by substituting the following for clauses (I) and (II) of subparagraph (b):

“(I) tea and preparations thereof when supplied in non-drinkable form,

(II) cocoa, coffee and chicory and other roasted coffee substitutes, and preparations and extracts thereof, when supplied in non-drinkable form,”,

and

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

“(ba) tea and preparations thereof when supplied in drinkable form,

(bb) cocoa, coffee and chicory and other roasted coffee substitutes, and preparations and extracts thereof, when supplied in drinkable form,”.