PART 3

Value-Added Tax

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

83 .— With effect from 1 July 2008 section 1 of the Principal Act is amended in subsection (1)—

(a) by inserting the following before the meaning assigned to “agricultural produce”:

“ ‘ accountable person ’ has the meaning assigned to it by section 8;

‘ accounting year ’ means a period of 12 months ending on 31 December, but if a taxable person customarily makes up accounts for periods of 12 months ending on another fixed date, then, for such a person, a period of 12 months ending on that fixed date;”,

(b) by substituting the following for the definition of “business”:

“ ‘ business ’ means an economic activity, whatever the purpose or results of that activity, and includes any activity of producers, traders or persons supplying services, including mining and agricultural activities and activities of the professions, and the exploitation of tangible or intangible property for the purposes of obtaining income therefrom on a continuing basis;”,

(c) by inserting the following definition after the definition of “business”:

“ ‘ capital goods ’ means developed immovable goods and a reference to a capital good includes a reference to any part thereof and the term capital good shall be construed accordingly;”,

(d) by inserting the following definition after the definition of “Community”:

“ ‘ completed ’, in respect of immovable goods, has the meaning assigned to it by section 4B;”,

(e) by substituting in paragraph (a) of the definition of ‘exempted activity’ “sections 4(6), 4B(2) and 4C(2)” for “section 4(6)”,

(f) by inserting the following after the definition of “free port”:

“ ‘ freehold equivalent interest ’ means an interest in immovable goods other than a freehold interest the transfer of which constitutes a supply of goods in accordance with section 3;”,

(g) by inserting the following after the definition of “importation of goods”:

“ ‘independently’, in relation to a taxable person excludes a person who is employed or who is bound to an employer by a contract of employment or by any other legal ties creating the relationship of employer and employee as regards working conditions, remuneration and the employer’s liability;”,

(h) by inserting the following after the definition of “intra-Community acquisition of goods”:

“ ‘joint option for taxation’ has the meaning assigned to it by section 4B;

‘ landlord’s option to tax ’ has the meaning assigned to it by section 7A;”,

(i) by inserting the following after “have expired” in the definition of “surrender”:

“but in the case of an interest in immovable goods created on or after 1 July 2008, the failure of the lessee to exercise any option of the type referred to in subsection (1)(b) of section 4 in relation to that interest does not constitute a surrender”,

and

(j) by substituting the following for the definition of “taxable person”:

“ ‘ taxable person ’ means a person who independently carries out any business in the State;”.

84 .— Section 2 of the Principal Act is amended with effect from 1 July 2008 in subsection (1) by substituting the following paragraph for paragraph (a):

“(a) on the supply of goods and services effected within the State for consideration by a taxable person acting as such, other than in the course or furtherance of an exempted activity, and”.

85 .— With effect from 1 July 2008 section 3 of the Principal Act is amended—

(a) in subsection (1)(e) by substituting “being movable goods” for “being goods”,

(b) by inserting the following after subsection (1B):

“(1C) For the purposes of this Act in the case of immovable goods ‘ supply ’ in relation to goods shall be regarded as including—

(a) the transfer in substance of the right to dispose of immovable goods as owner or the transfer in substance of the right to dispose of immovable goods, and

(b) transactions where the holder of an estate or interest in immovable goods enters into a contract or agreement with another person in relation to the creation, establishment, alteration, surrender, relinquishment or termination of rights in respect of those immovable goods, apart from mortgages, and consideration or payments which amount to 50 per cent or more of the open market value of the immovable goods at the time the contract or agreement is concluded are payable pursuant to or associated with the contract or agreement or otherwise either before the making of the contract or agreement or within 5 years of the commencement of such contract or agreement.”,

and

(c) in subsection (8)—

(i) by substituting “Where a person who is not established in the State makes an intra-Community acquisition of goods in the State and makes a subsequent supply of those goods to an accountable person in the State” for “Where a taxable person who is not established in the State makes an intra-Community acquisition of goods in the State and makes a subsequent supply of those goods to a taxable person in the State”, and

(ii) in paragraph (a) of the proviso by substituting “the person” for “the taxable person”.

86 .— Section 4 of the Principal Act is amended by inserting the following after subsection (10):

“(11) Subject to section 4C the other provisions of this section, apart from subsections (9) and (10), shall not apply as regards—

(a) a disposal of an interest in immovable goods, or

(b) a surrender of possession of immovable goods,

which occurs after 1 July 2008. Subsection (9) shall apply only as respects a reversionary interest created prior to 1 July 2008. Subsection (10) shall apply only as respects an interest which is disposed of prior to 1 July 2008.”.

87 .— With effect from 1 July 2008 section 4A of the Principal Act is repealed.

88 .— The Principal Act is amended with effect from 1 July 2008 by inserting the following sections before section 5—

“Supplies of immovable goods.

4B.— (1) In this section—

‘ completed ’, in respect of immovable goods, means that the development of those goods has reached the state, apart from only such finishing or fitting work that would normally be carried out by or on behalf of the person who will use them, where those goods can effectively be used for purposes for which those goods were designed, and the utility services required for those purposes are connected to those goods;

‘ occupied ’, in respect of immovable goods, means—

(a) occupied and fully in use following completion where that use is one for which planning permission for the development of those goods was granted, and

(b) where those goods are let, occupied and fully in such use by the tenant.

(2) Subject to subsections (3), (5) and (7), tax is not chargeable on the supply of immovable goods—

(a) that have not been developed,

(b) being completed immovable goods, the most recent completion of which occurred more than 5 years prior to that supply, and those goods have not been developed within that 5 year period,

(c) being completed immovable goods that have not been developed since the most recent completion of those goods, where that supply—

(i) occurs after the immovable goods have been occupied for an aggregate of at least 24 months following the most recent completion of those goods, and

(ii) takes place after a previous supply of those goods on which tax was chargeable and that previous supply—

(I) took place after the most recent completion of those goods, and

(II) was a transaction between taxable persons who were not connected within the meaning of section 7A,

(d) being a building that was completed more than 5 years prior to that supply and on which development was carried out in the 5 years prior to that supply where—

(i) such development did not and was not intended to adapt the building for a materially altered use, and

(ii) the cost of such development did not exceed 25 per cent of the consideration for that supply,

or

(e) being a building that was completed within the 5 years prior to that supply where—

(i) the building had been occupied for an aggregate of at least 24 months following that completion,

(ii) that supply takes place after a previous supply of the building on which tax was chargeable and that previous supply—

(I) took place after that completion of the building, and

(II) was a transaction between taxable persons who were not connected within the meaning of section 7A,

and

(iii) if any development of that building occurred after that completion—

(I) such development did not and was not intended to adapt the building for a materially altered use, and

(II) the cost of such development did not exceed 25 per cent of the consideration for that supply.

(3) Where a person supplies immovable goods to another person and in connection with that supply a taxable person enters into an agreement with that other person or with a person connected with that other person to carry out a development in relation to those immovable goods, then—

(a) the person who supplies the goods shall, in relation to that supply, be deemed to be a taxable person,

(b) the supply of the said immovable goods shall be deemed to be a supply of those goods to which section 2 applies, and

(c) subsection (2) does not apply to that supply.

(4) Section 8(3) does not apply in relation to a person who makes a supply of immovable goods.

(5) Where a taxable person supplies immovable goods to another taxable person in circumstances where that supply would otherwise be exempt in accordance with subsection (2) then tax shall, notwithstanding subsection (2), be chargeable on that supply, where the supplier and the taxable person to whom the supply is made enter an agreement in writing to opt to have tax chargeable on that supply (in this Act referred to as a ‘joint option for taxation’).

(6) Where a joint option for taxation is exercised in accordance with subsection (5) then—

(a) the person to whom the supply is made shall, in relation to that supply, be an accountable person and shall be liable to pay the tax chargeable on that supply as if that person supplied those goods, and

(b) the person who made the supply shall not be accountable for or liable to pay the said tax.

(7) (a) Where a taxable person supplies immovable goods to another person in circumstances where that supply would otherwise be exempt in accordance with subsection (2), tax shall, notwithstanding subsection (2), be chargeable on that supply where—

(i) the immovable goods are buildings designed as or capable of being used as a dwelling,

(ii) the person who makes that supply is a person who developed the immovable goods in the course of a business of developing immovable goods or a person connected with that person, within the meaning of section 7A, and

(iii) the person who developed those immovable goods was entitled to a deduction under section 12 for tax chargeable to that person in respect of that person’s acquisition or development of those immovable goods.

(b) In the case of a building to which this subsection would apply if the building were supplied by the taxable person at any time during the capital goods scheme adjustment period for that building—

(i) section 12E(6) shall not apply, and

(ii) notwithstanding section 12E(4) the proportion of total tax incurred that is deductible by that person shall be treated as the initial interval proportion of deductible use.

Transitional measures for supplies of immovable goods.

4C.— (1) This section applies to—

(a) immovable goods which are acquired or developed by a taxable person prior to 1 July 2008 and have not been disposed of by that taxable person prior to that date, until such time as those goods have been disposed of by that taxable person on or after that date, and

(b) an interest in immovable goods within the meaning of section 4 other than a freehold interest or a freehold equivalent interest, created by a taxable person prior to 1 July 2008 and held by a taxable person on 1 July 2008.

(2) In the case of a supply of immovable goods to which subsection (1)(a) applies, being completed immovable goods within the meaning of section 4B,—

(a) where the person supplying those goods had no right to deduction under section 12 in relation to the tax chargeable on the acquisition or development of those goods prior to 1 July 2008, and

(b) if any subsequent development of those immovable goods occurs on or after 1 July 2008—

(i) that development does not and is not intended to adapt the immovable goods for a materially altered use, and

(ii) the cost of that development does not exceed 25 per cent of the consideration for that supply,

then, subject to section 4B(3), that supply is not chargeable to tax but a joint option for taxation may be exercised in respect of that supply in accordance with section 4B(5) and that tax is payable in accordance with section 4B(6).

(3) Where a person referred to in subsection (1)—

(a) acquired, developed or has an interest in immovable goods to which this section applies,

(b) was entitled to deduct tax, in accordance with section 12 on that person’s acquisition or development of those goods, and

(c) creates a letting of those immovable goods to which paragraph (iv) of the First Schedule applies,

then, that person shall calculate an amount in accordance with the formula in section 4(3)(ab) and that amount shall be payable as if it were tax due by that person in accordance with section 19 for the taxable period in which that letting takes place.

(4) An assignment or surrender of an interest in immovable goods to which subsection (1)(b) applies is deemed to be a supply of immovable goods for the purposes of this Act for a period of 20 years from the creation of the interest or the most recent assignment or surrender of that interest before 1 July 2008, whichever is the later.

(5) If a person makes a supply of immovable goods to which this section applies and tax is chargeable on that supply and that person was not entitled to deduct all the tax charged to that person on the acquisition or development of those immovable goods that person shall be entitled to make the appropriate adjustment that would apply under section 12E(7)(a) as if the capital goods scheme applied to that transaction.

(6) In the case of an assignment or surrender of an interest in immovable goods referred to in subsection (4)—

(a) tax shall be chargeable if the person who makes the assignment or surrender was entitled to deduct in accordance with section 12 any of the tax chargeable on the acquisition of that interest, or the development of those immovable goods, and

(b) tax shall not be chargeable where the person who makes the assignment or surrender had no right to deduction under section 12 on the acquisition of that interest or the development of those immovable goods, but a joint option for taxation of that assignment or surrender may be exercised.

(7) (a) Notwithstanding section 10, the amount on which tax is chargeable on a taxable assignment or surrender to which subsection (6) applies shall be the amount calculated in accordance with the formula in paragraph (b) divided by the rate as specified in section 11(1)(d) expressed in decimal form.

(b) The amount of tax due and payable in respect of a taxable assignment or surrender to which subsection (6) applies is an amount calculated in accordance with the following formula:

T x N

Y

where—

T is the total tax incurred referred to in subsection (11)(d),

N is the number of full intervals plus one, that remain in the adjustment period referred to in subsection (11)(c), at the time of the assignment or surrender,

Y is the total number of intervals in that adjustment period for the person making the assignment or surrender,

and section 4(8) shall apply to that tax.

(8) (a) Where an interest in immovable goods referred to in subsection (6) is assigned or surrendered during the adjustment period and tax is payable in respect of that assignment or surrender, then the person who makes the assignment or surrender shall issue a document to the person to whom the interest is being assigned or surrendered containing the following information:

(i) the amount of tax due and payable on that assignment or surrender, and

(ii) the number of intervals remaining in the adjustment period.

(b) Where paragraph (a) applies, the person to whom the interest is assigned or surrendered shall be a capital goods owner for the purpose of section 12E in respect of the capital good being assigned or surrendered, and shall be subject to the provisions of that section and for this purpose—

(i) the adjustment period shall be the period referred to in subsection (11)(c) as correctly specified on the document referred to in paragraph (a),

(ii) the total tax incurred shall be the amount of tax referred to in subsection (11)(d) as correctly specified in the document referred to in paragraph (a), and

(iii) the initial interval shall be a period of 12 months beginning on the date on which the assignment or surrender occurs.

(9) (a) Where a person cancels an election to be an accountable person in accordance with section 8(5A) then, in respect of the immovable goods which were used in supplying the services for which that person made that election, section 12E does not apply if those immovable goods are held by that person on 1 July 2008 and are not further developed after that date.

(b) Section 8(5A) does not apply to immovable goods acquired or developed on or after 1 July 2008.

(10) In the application of section 12E to immovable goods and interests in immovable goods to which this section applies, subsections (4), (5) and (6) of that section shall be disregarded in respect of the person who owns those immovable goods or holds an interest in those immovable goods on 1 July 2008.

(11) For the purposes of applying section 12E to immovable goods, or interests in immovable goods to which this section applies—

(a) any interest in immovable goods to which this section applies shall be treated as a capital good,

(b) any person who has an interest in immovable goods to which this section applies shall be treated as a capital goods owner, but shall not be so treated to the extent that the person has a reversionary interest in those immovable goods if those goods were not developed, by, on behalf of, or to the benefit of that person,

(c) the period to be treated as the adjustment period in respect of immovable goods to which this section applies is—

(i) in the case of the acquisition of the freehold interest or freehold equivalent interest in those immovable goods, 20 years from the date of that acquisition,

(ii) in the case of the creation of an interest in those immovable goods, 20 years or, if the interest when it was created was for a period of less than 20 years, the number of full years in that interest when created, whichever is the shorter, or

(iii) in the case of the assignment or surrender of an interest in immovable goods the period remaining in that interest at the time of the assignment or surrender of that interest or 20 years, whichever is the shorter,

but where the immovable goods have been developed since the acquisition of those immovable goods or the creation of that interest, 20 years from the date of the most recent development of those goods,

(d) the amount of tax charged, or the amount of tax that would have been chargeable but for the application of sections 3(5)(b)(iii) or 13A, to the person treated as the capital goods owner on the acquisition of, or the most recent development of, the capital goods shall be treated as the total tax incurred,

(e) the total tax incurred divided by the number of years in the adjustment period referred to in paragraph (c) shall be treated as the base tax amount,

(f) each year in the adjustment period referred to in paragraph (c) shall be treated as an interval,

(g) the first 12 months of the adjustment period referred to in paragraph (c) shall be treated as the initial interval,

(h) the second year of the adjustment period referred to in paragraph (c) shall be treated as the second interval,

(i) each year following the second year in the adjustment period referred to in paragraph (c) shall be treated as a subsequent interval,

(j) the amount which shall be treated as the total reviewed deductible amount shall be the amount of the total tax incurred as provided for in paragraph (d) less—

(i) any amount of the total tax incurred which was charged to the person treated as the capital goods owner but which that owner was not entitled to deduct in accordance with section 12,

(ii) any amount accounted for in accordance with section 12D(4) by the person treated as the capital goods owner in respect of a transfer of the goods to that owner prior to 1 July 2008, and

(iii) any tax payable in accordance with subsection (3) or section 4(3)(ab) by the person treated as the capital goods owner,

(k) the amount referred to in paragraph (d) less the amount referred to in paragraph (j) shall be treated as the non-deductible amount,

and for the purposes of applying paragraphs (f), (h) and (i) ‘ year ’ means each 12 month period in the adjustment period, the first of which begins on the first day of the initial interval referred to in paragraph (g).

(12) Where a taxable person acquires immovable goods on or after 1 July 2007, then, notwithstanding subsection (10), section 12E(4) shall apply and, notwithstanding subsection (11)(j), the total reviewed deductible amount shall have the meaning assigned to it by section 12E. However this subsection does not apply where a taxable person has made an adjustment in accordance with section 12(4)(f) in respect of those goods.”.

89 .— With effect from 1 July 2008 section 5 of the Principal Act is amended—

(a) in subsection (3)(a) by inserting “other than immovable goods” after “the use of goods”, and

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

“(3B) The use of immovable goods forming part of the assets of a business—

(a) for the private use of an accountable person or of such person’s staff, or

(b) for any purpose other than those of the accountable person’s business,

is a taxable supply of services if—

(i) that use occurs during a period of 20 years following the acquisition or development of those goods by the accountable person, and

(ii) those goods are treated for tax purposes as forming part of the assets of the business at the time of their acquisition or development.”.

90 .— Section 7 of the Principal Act is amended—

(a) by inserting in subsection (3) “or in accordance with section 7B(3)” after “at the request of a person”, and

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

“(5) (a) No waiver of exemption from tax in accordance with this section shall commence on or after 1 July 2008.

(b) Any waiver of exemption from tax which applies under this section shall not extend to any letting of immovable goods where those goods are acquired or developed on or after 1 July 2008.

(c) For the purpose of applying paragraph (b), a waiver of exemption, which is in place on 18 February 2008 in respect of the letting of immovable goods which are undergoing development on that day by or on behalf of the person who has that waiver, may extend to a letting of those immovable goods.”.

91 .— The Principal Act is amended with effect from 1 July 2008 by inserting the following sections after section 7:

“Option to tax lettings of immovable goods.

7A.— (1) (a) Tax shall be chargeable in accordance with this Act on the supply of a service to which paragraph (iv) of the First Schedule relates (in this section referred to as a ‘letting’) where, subject to subsections (2) and (4), the supplier (in this section referred to as a ‘landlord’) opts to make that letting so chargeable, and a landlord who exercises this option (referred to in this Act as a ‘landlord’s option to tax’) shall, notwithstanding section 8(3), be an accountable person and liable to account for the tax on that letting in accordance with this Act, and that letting shall not be a supply to which section 6 applies.

(b) Where a taxable person is entitled to deduct tax on the acquisition or development of immovable goods on the basis that the goods will be used for the purpose of a letting or lettings in respect of which a landlord’s option to tax will apply, then—

(i) that person shall be treated as having exercised the landlord’s option to tax in respect of any lettings of those immovable goods, and

(ii) that option shall be deemed to continue in place until that person makes a letting in respect of which neither of the conditions of paragraph (c) are fulfilled.

(c) A landlord’s option to tax in respect of a letting is exercised by—

(i) a provision in writing in a letting agreement between the landlord and the person to whom the letting is made (in this section referred to as a ‘tenant’) that tax is chargeable on the rent, or

(ii) the issuing by the landlord of a document to the tenant giving notification that tax is chargeable on the letting.

(d) A landlord’s option to tax in respect of a letting is terminated—

(i) in the case of an option exercised in accordance with paragraph (b), by making a letting of the immovable goods referred to in that paragraph in respect of which neither of the conditions of paragraph (c) are fulfilled,

(ii) in the case of an option exercised in accordance with paragraph (c), by—

(I) an agreement in writing between the landlord and tenant that the option is terminated and specifying the date of termination, or

(II) the delivery to the tenant of a document giving notification that the option has been terminated and specifying the date of termination,

(iii) when the landlord and tenant become connected persons,

(iv) when a person connected with the landlord commences to occupy the immovable goods that are subject to that letting whether that person occupies those goods by way of letting or otherwise, or

(v) when the immovable goods that are subject to that letting are used or to be used for residential purposes within the meaning of subsection (4).

(2) (a) A landlord may not opt to tax a letting—

(i) subject to paragraph (b), where that landlord and the tenant in respect of that letting are connected persons, or

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

(b) Paragraph (a)(i) shall not apply where the immovable goods which are the subject of the letting are used for the purposes of supplies or activities which entitle the tenant to deduct at least 90 per cent of the tax chargeable on the letting in accordance with section 12. However, where a landlord has exercised a landlord’s option to tax in respect of a letting to which paragraph (a)(i) would have applied but for this paragraph, paragraph (a)(i) shall apply from the end of the first accounting year in which the goods are used for the purposes of supplies or activities which entitle the tenant to deduct less than 90 per cent of the said tax chargeable.

(3) (a) For the purposes of this section any question of whether a person is connected with another person shall be determined in accordance with the following:

(i) a person is connected with an individual if that person is the individual’s spouse, or is a relative, or the spouse of a relative, of the individual or of the individual’s spouse,

(ii) a person is connected with any person with whom he or she is in partnership, and with the spouse or a relative of any individual with whom he or she is in partnership,

(iii) subject to clauses (IV) and (V) of subparagraph (v), a person is connected with another person if he or she has control over that other person, or if the other person has control over the first-mentioned person, or if both persons are controlled by another person or persons,

(iv) a body of persons is connected with another person if that person, or persons connected with him or her, have control of that body of persons, or the person and persons connected with him or her together have control of it,

(v) a body of persons is connected with another body of persons—

(I) if the same person has control of both or a person has control of one and persons connected with that person or that person and persons connected with that person have control of the other,

(II) if a group of 2 or more persons has control of each body of persons and the groups either consist of the same persons or could be regarded as consisting of the same persons by treating (in one or more cases) a member of either group as replaced by a person with whom he or she is connected,

(III) if both bodies of persons act in pursuit of a common purpose,

(IV) if any person or any group of persons or groups of persons having a reasonable commonality of identity have or had the means or power, either directly or indirectly, to determine the activities carried on or to be carried on by both bodies of persons, or

(V) if both bodies of persons are under the control of any person or group of persons or groups of persons having a reasonable commonality of identity,

(vi) a person in the capacity as trustee of a settlement is connected with—

(I) any person who in relation to the settlement is a settlor, or

(II) any person who is a beneficiary under the settlement.

(b) In this subsection—

‘ control ’, in the case of a body corporate or in the case of a partnership, has the meaning assigned to it by section 8(3B);

‘ relative ’ means a brother, sister, ancestor or lineal descendant.

(4) A landlord’s option to tax may not be exercised in respect of all or part of a house or 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—

(a) governed by the Residential Tenancies Act 2004 ,

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

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

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

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

and a landlord’s option to tax, once exercised, shall immediately cease to have effect to the extent that the immovable goods which are the subject of the letting to which the option applies, come to be used for a residential purpose.

Transitional measures: waiver of exemption.

7B.— (1) This section applies to an accountable person who had waived his or her right to exemption from tax in accordance with section 7 and who had not cancelled that waiver before 1 July 2008 (hereafter in this section referred to as a ‘landlord’).

(2) Section 12E does not apply to a landlord to the extent that tax relating to the acquisition or development of immovable goods has been or would be taken into account in calculating, in accordance with section 7(3), the sum, if any, due by that landlord as a condition of the cancellation of a waiver.

(3) Where a landlord has made a letting and, were that letting not already subject to a waiver, that letting would be one in respect of which the landlord would not, because of the provisions of section 7A(2), be entitled to exercise a landlord’s option to tax in accordance with section 7A, then the landlord’s waiver of exemption shall, subject to subsection (4), immediately cease to apply to that letting, and—

(a) that landlord shall pay the amount, as if it were tax due by that person in accordance with section 19 for the taxable period in which the waiver ceases to apply to that letting and the amount shall be the sum, if any, which would be payable in accordance with section 7(3) in respect of the cancellation of a waiver as if that landlord’s waiver applied only to the immovable goods or the interest in immovable goods subject to that letting to which the waiver has ceased to apply, and

(b) the amounts taken into account in calculating that sum, if any, shall be disregarded in any future cancellation of that waiver.

(4) (a) Subject to paragraph (c), where a landlord has a letting to which subsection (3) would otherwise apply, the provisions of that subsection shall not apply while, on the basis of the letting agreement in place, the tax that the landlord will be required to account for, in equal amounts for each taxable period, in respect of the letting during the next 12 months is not less than the amount calculated at that time in accordance with the formula in subsection (5).

(b) Where the conditions in paragraph (a) fail to be satisfied because of a variation in the terms of the lease or otherwise or if the tax paid at any time in respect of the letting is less than the tax payable, this subsection shall cease to apply.

(c) This subsection applies to a letting referred to in paragraph (a)—

(i) where a landlord has a waiver in place on 18 February 2008 and—

(I) on 1 July 2008 that letting had been in place since 18 February 2008, or

(II) the immovable goods subject to the letting are owned by that landlord on 18 February 2008 and are in the course of development by or on behalf of that landlord on that day,

or

(ii) where a landlord holds an interest, other than a freehold interest or a freehold equivalent interest in the immovable goods subject to the letting, acquired between 18 February 2008 and 30 June 2008 from a person with whom the landlord is not connected, within the meaning of section 7A, in a transaction which is treated as a supply of goods in accordance with section 4.

(5) The formula to be used for the purposes of subsection (4) is:

A — B

12 — Y

where—

A is the amount of tax that would be taken into account for the purposes of section 7(3) in respect of the acquisition or development of the immovable goods, if the waiver were being cancelled at the time referred to in subsection (4),

B is the amount of tax chargeable on the consideration by the landlord in respect of the letting of those immovable goods and paid in accordance with section 19 that would be taken into account for the purposes of section 7(3) if the waiver were being cancelled at that time, and if that letting were the only one to which that waiver applied, and

Y is 11, or the number of full years since the later of—

(i) the date of the first letting of those goods, and

(ii) the date on which the landlord waived exemption,

where that number is less than 11 years.”.

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

(a) by substituting with effect from 1 July 2008 the following for subsection (1):

“(1) A taxable person who engages in the supply, within the State, of taxable goods or services shall be an accountable person and shall be accountable for and liable to pay the tax charged in respect of such supply. In addition the persons referred to in section 4B(3) and subsections (1A), (2), (2A) and (8) shall be accountable persons. However a person not established in the State who supplies goods in the State only in the circumstances set out in paragraph (f) or (g) of subsection (1A) or supplies a service in the State only in the circumstances set out in subsections (1B) and (2)(aa) shall not be an accountable person.”,

(b) in paragraph (f) of subsection (1A) with effect from 1 July 2008—

(i) by deleting subparagraph (iv), and

(ii) by substituting “an accountable person or be deemed to be an accountable person” for “a taxable person or be deemed to be a taxable person”,

(c) in paragraph (g) of subsection (1A) with effect from 1 July 2008—

(i) by substituting “Where a person” for “Where a taxable person”,

(ii) by deleting subparagraph (iv), and

(iii) by substituting “an accountable person or be deemed to be an accountable person” for “a taxable person or be deemed to be a taxable person”,

(d) by inserting the following after subsection (1A):

“(1B) (a) This subsection and sections 12(1)(vc) and 17(1C) shall be construed together with Chapter 2 of Part 18 of the Taxes Consolidation Act 1997 .

(b) With effect from 1 September 2008 where a principal, other than a principal to whom subparagraphs (ii) or (iii) of section 531 (1)(b) of the Taxes Consolidation Act 1997 applies, receives services consisting of construction operations (as defined in paragraphs (a) to (f) of section 530(1) of that Act) from a subcontractor, then that principal shall in relation to that supply be an accountable person or deemed to be an accountable person and shall be liable to pay the tax chargeable as if that principal supplied those services in the course or furtherance of business and the subcontractor shall not be accountable for or liable to pay the said tax in respect of such supplies.

(c) This subsection does not apply to services in respect of which the supplier issued or was required to issue an invoice in accordance with section 17 prior to 1 September 2008.”,

(e) in subsections (3), (3A) and (9) with effect from 1 May 2008 by substituting “€37,500” for “€35,000” and by substituting “€75,000” for “€70,000” wherever it occurs, and

(f) in subsection (8)(a) with effect from 1 July 2008 by substituting “, at least one of which is a taxable person,” for “and engaged in the supply of goods or services in the course or furtherance of business”.

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

(a) by inserting with effect from 1 July 2008 the following after subsection (4C):

“(4D) (a) The amount on which tax is chargeable in relation to a supply of services referred to in section 5(3B) in any taxable period shall be an amount equal to one sixth of one twentieth of the cost of the immovable goods used to provide those services, being—

(i) the amount on which tax was chargeable to the person making the supply in respect of that person’s acquisition or development of the immovable goods referred to in section 5(3B), and

(ii) in the case where section 3(5)(b)(iii) applied to the acquisition of the immovable goods, the amount on which tax would have been chargeable but for the application of that section,

adjusted to correctly reflect the proportion of the use of the goods in that period.

(b) The Revenue Commissioners may make regulations specifying methods which may be used—

(i) to identify the proportion which correctly reflects the extent to which immovable goods are used for the purposes referred to in section 5(3B), and

(ii) to calculate the relevant taxable amount or amounts.”,

(b) in subsection (8) by inserting with effect from 1 September 2008 the following after subparagraph (c):

“(d) This subsection does not apply in respect of a supply of services to which section 8(1B) applies.”,

and

(c) in subsection (9)—

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

“(ba) Subsections (a) and (b) apply in respect of transactions which take place prior to 1 July 2008.”,

and

(ii) with effect from 1 July 2008 in paragraph (c), by substituting “value” for “price” in both places where it occurs.

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

(a) in subsection (1)(a)—

(i) in paragraph (iiic) with effect from 1 July 2008 by substituting “section 4B(6)(a) or 4(8)” for “section 4(8)”, and

(ii) with effect from 1 September 2008 by inserting the following after subparagraph (vb):

“(vc) the tax chargeable during the period, being tax for which the principal is liable by virtue of section 8(1B) in respect of construction operations services received by that principal; but this subparagraph shall apply only where that principal would be entitled to a deduction of that tax elsewhere under this subsection if that tax had been charged to such principal by another accountable person,”,

(b) in subsection (4) with effect from 1 July 2008—

(i) in paragraph (a) by inserting “movable” after “means” in the definition of “dual-use inputs”, and

(ii) in paragraph (f) by substituting “accounting year” for “accounting period”,

and

(c) with effect from 1 July 2008 by deleting subsection (5).

95 .— Section 12B of the Principal Act is amended—

(a) in subsection (3) with effect from 1 July 2008 by substituting the following for the definition of “taxable dealer”:

“ ‘ taxable dealer ’—

(a) means an accountable person who in the course or furtherance of business, whether acting on that person’s own behalf, or on behalf of another person pursuant to a contract under which commission is payable on purchase or sale, purchases or acquires means of transport as stock-in-trade with a view to resale, and

(b) includes a person supplying financial services of the kind specified in subparagraph (i)(e) of the First Schedule who acquires or purchases means of transport for the purpose of the supply thereof as part of an agreement of the kind referred to in section 3(1)(b),

and, for the purpose of this interpretation, a person in another Member State shall be deemed to be a taxable dealer where, in similar circumstances, that person would be a taxable dealer in the State under this section;”,

and

(b) in subsection (11)(a) by inserting “and, for the avoidance of doubt, the amount of tax chargeable in respect of that supply is included and was always included in the amount deductible in accordance with paragraph (b) and accordingly is not included and was never included in any amount which the taxable person is entitled to deduct in accordance with section 12(1)(a)(iii)” after “section 3(1)(e)”.

96 .— Section 12C of the Principal Act is amended with effect from 1 July 2008 in the definition of “taxable dealer” in subsection (5) by inserting “and includes a person supplying financial services of the kind specified in subparagraph (i)(e) of the First Schedule who purchases agricultural machinery for the purpose of the supply thereof as part of an agreement of the kind referred to in section 3(1)(b)” after “stock-in-trade with a view to resale”.

97 .— Section 12D of the Principal Act is amended by inserting the following after subsection (4):

“(5) This section does not apply to a transfer of an interest in immovable goods which occurs on or after 1 July 2008.”.

98 .— The Principal Act is amended with effect from 1 July 2008 by inserting the following section after section 12D:

“12E.— (1) This section applies to capital goods—

(a) on the supply or development of which tax was chargeable to a taxable person, or

(b) on the supply of which tax would have been chargeable to a taxable person but for the application of section 3(5)(b)(iii).

(2) In this section—

‘ adjustment period ’, in relation to a capital good, means the period encompassing the number of intervals as provided for in subsection (3)(a) during which adjustments of deductions are required to be made in respect of a capital good;

‘ base tax amount ’, in relation to a capital good, means the amount calculated by dividing the total tax incurred in relation to that capital good by the number of intervals in the adjustment period applicable to that capital good;

‘ capital goods owner ’ means—

(a) except where paragraph (b) applies, a taxable person who incurs expenditure on the acquisition or development of a capital good,

(b) in the case of a taxable person who is a flat-rate farmer, means a taxable person who incurs expenditure to develop or acquire a capital good other than a building or structure designed and used solely for the purposes of a farming business or for fencing, drainage or reclamation of land, and which has actually been put to use in such business;

‘ deductible supplies or activities ’ has the meaning assigned to it by section 12(4);

‘ initial interval ’, in relation to a capital good, means a period of 12 months beginning on the date when a capital good is completed or, in the case of a capital good that is supplied following completion, the initial interval for the recipient of that supply is the 12 month period beginning on the date of that supply;

‘ initial interval proportion of deductible use ’, in relation to a capital good, means the proportion that correctly reflects the extent to which a capital good is used during the initial interval for the purposes of a capital goods owner’s deductible supplies or activities;

‘ interval ’, in relation to a capital good, means the initial, second or subsequent interval in an adjustment period, whichever is appropriate;

‘interval deductible amount’, in relation to a capital good in respect of the second and each subsequent interval, means the amount calculated by multiplying the base tax amount in relation to that capital good by the proportion of deductible use for that capital good applicable to the relevant interval;

‘non-deductible amount’, in relation to a capital good, means the amount which is the difference between the total tax incurred in relation to that capital good and the total reviewed deductible amount in relation to that capital good;

‘proportion of deductible use’, in relation to a capital good for an interval other than the initial interval, means the proportion that correctly reflects the extent to which a capital good is used during that interval for the purposes of a capital goods owner’s deductible supplies or activities;

‘reference deduction amount’, in relation to a capital good, means the amount calculated by dividing the total reviewed deductible amount in relation to that capital good by the number of intervals in the adjustment period applicable to that capital good;

‘ refurbishment ’ means development on a previously completed building, structure or engineering work;

‘second interval’, in relation to a capital good, means the period beginning on the day following the end of the initial interval in the adjustment period applicable to that capital good and ending on the final day of the accounting year during which the second interval begins;

‘subsequent interval’, in relation to a capital good, means each accounting year of a capital goods owner in the adjustment period applicable to that capital good, which follows the second interval;

‘ total reviewed deductible amount ’, in relation to a capital good, means the amount calculated by multiplying the total tax incurred in relation to that capital good by the initial interval proportion of deductible use in relation to that capital good;

‘ total tax incurred ’, in relation to a capital good, has the meaning assigned to it by subsection (3)(b).

(3) (a) In relation to a capital good the number of intervals in the adjustment period during which adjustments of deductions are required under this section to be made, is—

(i) in the case of refurbishment, 10 intervals,

(ii) in the case of a capital good to which paragraph (c) or (d) of subsection (6) applies, the number of full intervals remaining in the adjustment period applicable to that capital good plus one as required to be calculated in accordance with the formula in subsection (7)(b), and

(iii) in all other cases, 20 intervals.

(b) In this section ‘ total tax incurred ’ in relation to a capital good means—

(i) the amount of tax charged to a capital goods owner in respect of that owner’s acquisition or development of a capital good,

(ii) in the case of a transferee where a transfer of ownership of a capital good to which section 3(5)(b)(iii) applies—

(I) where such a transfer would have been a supply but for the application of section 3(5)(b)(iii) and that supply would have been exempt in accordance with section 4B(2), then the total tax incurred that is required to be included in the copy of the capital good record that is required to be furnished by the transferor in accordance with subsection (10), and

(II) where such a transfer is not one to which clause (I) applies, then the amount of tax that would have been chargeable on that transfer but for the application of sections 3(5)(b)(iii) and 13A,

and

(iii) the amount of tax that would have been chargeable, but for the application of section 13A, to a capital goods owner on that owner’s acquisition or development of a capital good.

(c) Where a capital goods owner acquires a capital good—

(i) by way of a transfer, being a transfer to which section 3(5)(b)(iii) applies other than a transfer to which subsection (10) applies, on which tax would have been chargeable but for the application of section 3(5)(b)(iii), or

(ii) on the supply or development of which tax was chargeable in accordance with section 13A,

then, for the purposes of this section, that capital goods owner is deemed to have claimed a deduction in accordance with section 12 of the tax that would have been chargeable—

(I) on the transfer of that capital good but for the application of section 3(5)(b)(iii), less any amount accounted for by that owner in respect of that transfer in accordance with subsection (7)(d), and

(II) on the supply or development of that capital good but for the application of section 13A.

(d) Where a capital goods owner supplies or transfers by means of a transfer to which section 3(5)(b)(iii) applies a capital good during the adjustment period then the adjustment period for that capital good for that owner shall end on the date of that supply or transfer.

(4) (a) Where the initial interval proportion of deductible use in relation to a capital good differs from the proportion of the total tax incurred in relation to that capital good which was deductible by that owner in accordance with section 12, then that owner shall, at the end of the initial interval, calculate an amount in accordance with the following formula:

A — B

where—

A is the amount of the total tax incurred in relation to that capital good which was deductible by that owner in accordance with section 12, and

B is the total reviewed deductible amount in relation to that capital good.

(b) Where in accordance with paragraph (a)—

(i) A is greater than B, then the amount calculated in accordance with the formula in paragraph (a) shall be payable by that owner as if it were tax due in accordance with section 19 for the taxable period immediately following the end of the initial interval, or

(ii) B is greater than A, then that owner is entitled to increase the amount of tax deductible for the purposes of section 12 by the amount calculated in accordance with paragraph (a) for the taxable period immediately following the end of the initial interval.

(c) Where a capital good is not used during the initial interval then the initial interval proportion of deductible use is the proportion of the total tax incurred that is deductible by the capital goods owner in accordance with section 12.

(5) (a) (i) Subject to subsection (6)(b), where in respect of an interval, other than the initial interval, the proportion of deductible use for that interval in relation to that capital good differs from the initial interval proportion of deductible use in relation to that capital good, then the capital goods owner shall, at the end of that interval, calculate an amount in accordance with the following formula:

C — D

where—

C is the reference deduction amount in relation to that capital good, and

D is the interval deductible amount in relation to that capital good.

(ii) Where in accordance with subparagraph (i)—

(I) C is greater than D, then the amount calculated in accordance with the formula in subparagraph (i) shall be payable by that owner as if it were tax due in accordance with section 19 for the taxable period immediately following the end of that interval, or

(II) D is greater than C, then that owner is entitled to increase the amount of tax deductible for the purposes of section 12 by the amount calculated in accordance with the formula in subparagraph (i) for the taxable period immediately following the end of that interval.

(b) Where for the second or any subsequent interval, a capital good is not used during that interval, the proportion of deductible use in respect of that capital good for that interval shall be the proportion of deductible use for the previous interval.

(6) (a) (i) Where in respect of a capital good for an interval other than the initial interval the proportion of deductible use expressed as a percentage differs by more than 50 percentage points from the initial interval proportion of deductible use expressed as a percentage, then the capital goods owner shall at the end of that interval calculate an amount in accordance with the following formula:

(C — D) x N

where—

C is the reference deduction amount in relation to that capital good,

D is the interval deductible amount in relation to that capital good, and

N is the number of full intervals remaining in the adjustment period at the end of that interval plus one.

(ii) Where in accordance with subparagraph (i)—

(I) C is greater than D, then the amount calculated in accordance with the formula in subparagraph (i) shall be payable by that owner as if it were tax due in accordance with section 19 for the taxable period immediately following the end of that interval, or

(II) D is greater than C, then that owner is entitled to increase the amount of tax deductible for the purposes of section 12 by the amount calculated in accordance with the formula in subparagraph (i) for the taxable period immediately following the end of that interval.

(iii) The provisions of subparagraph (i) shall not apply to a capital good or part thereof that has been subject to the provisions of paragraphs (c) or (d) during the interval to which subparagraph (i) applies.

(iv) Where a capital goods owner is obliged to carry out a calculation referred to in subparagraph (i) in respect of a capital good, then, for the purposes of the remaining intervals in the adjustment period, the proportion of deductible use in relation to that capital good for the interval in respect of which the calculation is required to be made shall be treated as if it were the initial interval proportion of deductible use in relation to that capital good and, until a further calculation is required under subparagraph (i), all other definition amounts shall be calculated accordingly.

(b) Where the provisions of paragraph (a) apply to an interval then the provisions of subsection (5) do not apply to that interval.

(c) Where a capital goods owner who is a landlord in respect of all or part of a capital good terminates his or her landlord’s option to tax in accordance with section 7A(1) in respect of any letting of that capital good, then—

(i) that owner is deemed, for the purposes of this section, to have supplied and simultaneously acquired the capital good to which that letting relates,

(ii) that supply shall be deemed to be a supply on which tax is not chargeable and no option to tax that supply in accordance with section 4B(5) shall be permitted on that supply, and

(iii) the capital good acquired shall be treated as a capital good for the purposes of this section and the amount calculated in accordance with subsection (7)(b) on that supply shall be treated as the total tax incurred in relation to that capital good.

(d) Where in respect of a letting of a capital good that is not subject to a landlord’s option to tax in accordance with section 7A(1), a landlord subsequently exercises a landlord’s option to tax in respect of a letting of that capital good, then—

(i) that landlord is deemed, for the purposes of this section, to have supplied and simultaneously acquired that capital good to which that letting relates,

(ii) that supply shall be deemed to be a supply on which tax is chargeable, and

(iii) the capital good acquired shall be treated as a capital good for the purposes of this section, and—

(I) the amount calculated in accordance with subsection (7)(a) shall be treated as the total tax incurred in relation to that capital good, and

(II) the total tax incurred shall be deemed to have been deducted in accordance with section 12 at the time of that supply.

(7) (a) Where a capital goods owner supplies a capital good or transfers a capital good, being a transfer to which section 3(5)(b)(iii) applies, other than a transfer to which subsection (10) applies, during the adjustment period in relation to that capital good, and where—

(i) tax is chargeable on that supply, or tax would have been chargeable on that transfer but for the application of section 3(5)(b)(iii), and

(ii) the non-deductible amount in relation to that capital good for that owner is greater than zero or in the case of a supply or transfer during the initial interval, that owner was not entitled to deduct all of the total tax incurred in accordance with section 12,

then that owner is entitled to increase the amount of tax deductible by that owner for the purposes of section 12 for the taxable period in which the supply or transfer occurs, by an amount calculated in accordance with the following formula:

E x N

T

where—

E is the non-deductible amount in relation to that capital good, or in the case of a supply before the end of the initial interval the amount of the total tax incurred in relation to that capital good which was not deductible by that owner in accordance with section 12,

N is the number of full intervals remaining in the adjustment period in relation to that capital good at the time of supply plus one, and

T is the total number of intervals in the adjustment period in relation to that capital good.

(b) Where a capital goods owner supplies a capital good during the adjustment period applicable to that capital good and where tax is not chargeable on the supply and where either—

(i) the total reviewed deductible amount in relation to that capital good is greater than zero, or

(ii) in the case of a supply before the end of the initial interval where the amount of the total tax incurred in relation to that capital good which was deductible by that owner in accordance with section 12 is greater than zero,

then that owner shall calculate an amount which shall be payable as if it were tax due in accordance with section 19 for the taxable period in which the supply occurs in accordance with the following formula:

B x N

T

where—

B is the total reviewed deductible amount in relation to that capital good, or, in the case of a supply to which subparagraph (ii) applies, the amount of the total tax incurred in relation to that capital good which that owner claimed as a deduction in accordance with section 12,

N is the number of full intervals remaining in the adjustment period in relation to that capital good at the time of supply plus one, and

T is the total number of intervals in the adjustment period in relation to that capital good.

(c) Where a capital goods owner supplies or transfers, being a transfer to which section 3(5)(b)(iii) applies, part of a capital good during the adjustment period, then for the remainder of the adjustment period applicable to that capital good—

(i) the total tax incurred,

(ii) the total reviewed deductible amount, and

(iii) all other definition amounts,

in relation to the remainder of that capital good for that owner shall be adjusted accordingly on a fair and reasonable basis.

(d) Where a transfer of ownership of a capital good occurs, being a transfer to which section 3(5)(b)(iii) applies, but excluding a transfer to which subsection (10) applies, and where the transferee would not have been entitled to deduct all of the tax that would have been chargeable on that transfer but for the application of section 3(5)(b)(iii), then that transferee shall calculate an amount as follows:

F — G

where—

F is the amount of tax that would have been chargeable but for the application of section 3(5)(b)(iii), and

G is the amount of that tax that would have been deductible in accordance with section 12 by that transferee if section 3(5)(b)(iii) had not applied to that transfer,

and that amount shall be payable by that transferee as if it were tax due in accordance with section 19 for the taxable period in which the transfer occurs and for the purposes of this section that amount shall be deemed to be the amount of the total tax incurred in relation to that capital good that the transferee was not entitled to deduct in accordance with section 12.

(8) (a) Where a tenant who has an interest other than a freehold equivalent interest in immovable goods is the capital goods owner in respect of a refurbishment carried out on those immovable goods, assigns or surrenders that interest, then that tenant shall calculate an amount in respect of that capital good which is that refurbishment in accordance with the formula in subsection (7)(b), and that amount shall be payable by that tenant as if it were tax due in accordance with section 19 for the taxable period in which the assignment or surrender occurs.

(b) Paragraph (a) shall not apply where—

(i) the total reviewed deductible amount in relation to that capital good is equal to the total tax incurred in relation to that capital good, or in relation to an assignment or surrender that occurs prior to the end of the initial interval in relation to that capital good the tenant was entitled to deduct all of the total tax incurred in accordance with section 12 in relation to that capital good,

(ii) the tenant enters into a written agreement with the person to whom the interest is assigned or surrendered, to the effect that that person shall be responsible for all obligations under this section in relation to the capital good referred to in paragraph (a) from the date of the assignment or surrender of the interest referred to in paragraph (a), as if—

(I) the total tax incurred and the amount deducted by that tenant in relation to that capital good were the total tax incurred and the amount deducted by the person to whom the interest is assigned or surrendered, and

(II) any adjustments required to be made under this section by the tenant were made,

and

(iii) the tenant issues a copy of the capital good record in respect of the capital good referred to in paragraph (a) to the person to whom the interest is being assigned or surrendered.

(c) Where paragraph (b) applies the person to whom the interest is assigned or surrendered shall be responsible for the obligations referred to in paragraph (b)(ii) and shall use the information in the copy of the capital good record issued by the tenant in accordance with paragraph (b)(iii) for the purposes of calculating any tax chargeable or deductible in accordance with this section in respect of that capital good by that person from the date of the assignment or surrender of the interest referred to in paragraph (a).

(d) Where the capital good is one to which subsection (11) applies paragraphs (a), (b) and (c) shall not apply.

(9) Where a capital goods owner—

(a) supplies a capital good during the adjustment period applicable to that capital good, and where tax is chargeable on that supply, or

(b) transfers, other than a transfer to which subsection (10) applies, a capital good during the adjustment period applicable to that capital good and tax would have been chargeable on that transfer but for the application of section 3(5)(b)(iii),

and where, at the time of that supply or transfer, that owner and the person to whom the capital good is supplied or transferred are connected within the meaning of section 7A, and where—

(i) the amount of tax chargeable on the supply of that capital good,

(ii) the amount of tax that would have been chargeable on the transfer of that capital good but for the application of section 3(5)(b)(iii), or

(iii) the amount of tax that would have been chargeable on the supply but for the application of section 13A,

is less than the amount, hereafter referred to as the “adjustment amount”, calculated in accordance with the following formula:

H x N

T

where—

H is the total tax incurred in relation to that capital good for the capital goods owner making the supply or transfer,

N is the number of full intervals remaining in the adjustment period in relation to that capital good plus one, and

T is the total number of intervals in the adjustment period in relation to that capital good,

then, that owner shall calculate an amount, which shall be payable by that owner as if it were tax due in accordance with section 19 for the taxable period in which the supply or transfer occurs, in accordance with the following formula:

I — J

where—

I is the adjustment amount, and

J is the amount of tax chargeable on the supply of that capital good, or the amount of tax that would have been chargeable on the transfer of that capital good but for the application of section 3(5)(b)(iii), or the amount of tax that would have been chargeable on the supply but for the application of section 13A.

(10) Where a capital goods owner transfers a capital good, being a transfer to which section 3(5)(b)(iii) applies and that transfer would have been a supply but for the application of section 3(5)(b)(iii), and where such supply would be exempt in accordance with section 4B(2) then—

(a) the transferor shall issue a copy of the capital good record to the transferee,

(b) the transferee shall be the successor to the capital goods owner transferring the capital good and shall be responsible for all obligations of that owner under this section from the date of the transfer of that capital good, as if—

(i) the total tax incurred and the amount deducted by the transferor in relation to that capital good were the total tax incurred and the amount deducted by the transferee, and

(ii) any adjustments required to be made under this section by the transferor were made,

and

(c) that transferee as successor shall use the information in the copy of the capital good record issued by the transferor in accordance with paragraph (a) for the purposes of calculating tax chargeable or deductible by that successor in accordance with this section for the remainder of the adjustment period applicable to that capital good from the date of transfer of that capital good.

(11) If a capital good is destroyed during the adjustment period in relation to that capital good, then no further adjustment under this section shall be made by the capital goods owner in respect of any remaining intervals in the adjustment period in relation to that capital good.

(12) A capital goods owner shall create and maintain a record (in this section referred to as a ‘capital good record’) in respect of each capital good and that record shall contain sufficient information to determine any adjustments in respect of that capital good required in accordance with this section.

(13) The Revenue Commissioners may make regulations necessary for the purposes of the operation of this section, in particular in relation to the duration of a subsequent interval where the accounting year of a capital goods owner changes.”.

99 .— Section 14 of the Principal Act is amended by inserting the following after subsection (2):

“(2A) Where an authorisation has issued to any person in accordance with subsection (1) and that person fails to issue a credit note in accordance with section 17(3)(b) in respect of any supply where the consideration as stated in the invoice issued by that person for that supply is reduced or a discount is allowed, then, at the time when a credit note should have issued in accordance with section 17(7)—

(a) such tax as is attributable to the reduction or discount shall be treated as being excluded from the application of subsection (1), and

(b) that person shall be liable for that tax as if it were tax due in accordance with section 19 at that time.”.

100 .— Section 16 of the Principal Act is amended—

(a) in subsection (1) by inserting “and entitlement to deductibility” after “tax”, and

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

“(5) The requirement to keep records in accordance with this section shall apply to records relating to—

(a) exercising and terminating a landlord’s option to tax,

(b) a capital good record referred to in section 12E, and

(c) a joint option for taxation.”.

101 .— (1) Section 17 of the Principal Act is amended—

(a) by inserting with effect from 1 September 2008 the following before subsection (2):

“(1C) (a) Where a subcontractor who is an accountable person supplies a service to which section 8(1B) applies, that subcontractor shall issue a document to the principal indicating—

(i) that the principal is liable to account for the tax chargeable on that supply, and

(ii) such other particulars as would be required to be included in that document if that document was an invoice required to be issued in accordance with subsection (1) but excluding the amount of tax payable.

(b) Where the principal and the subcontractor so agree, the provisions of subsection (14)(a) may apply to this document as if it were an invoice.”,

(b) by deleting with effect from 1 July 2008 subsection (1AAA),

(c) in subsection (1AB) by substituting with effect from 1 July 2008 “for the purposes of section 12C(1B)” for “for the purposes of subsection (1AAA) or section 12C(1B)”,

(d) by inserting the following after subsection (3A):

“(3B) Where, subsequent to the issue of an invoice by a person to another person in accordance with subsection (1) in respect of an amount received by way of a deposit and where section 19(2B) applies, then—

(a) the amount of the consideration stated on that invoice is deemed to be reduced to nil, and

(b) the person shall issue to that other person a document to be treated as if it were a credit note containing particulars of the reduction in such form and containing such other particulars as would be required to be included in that document if that document was a credit note, and if that other person is a taxable person the amount which that other person may deduct under section 12 shall be reduced by the amount of tax shown on the document as if that document were a credit note.”,

and

(e) in subsection (9)(aa) by inserting “in any case where subsection (3B) applies or” after “shall not apply”.

(2) Section 17(3B) (inserted by subsection(1)(d)) is further amended with effect from 1 July 2008 by substituting “an accountable person” for “a taxable person”.

102 .— Section 19 of the Principal Act is amended by inserting the following after subsection (2A):

“(2B) Where a person accounts in accordance with subsection (3) for tax referred to in subsection (2) on an amount received by way of a deposit from a customer before the supply of the goods or services to which it relates, and—

(a) that supply does not subsequently take place owing to a cancellation by the customer,

(b) the cancellation is recorded as such in the books and records of that person,

(c) the deposit is not refunded to the customer, and

(d) no other consideration, benefit or supply is provided to the customer by any person in lieu of the refund of that amount,

then, the tax chargeable under section 2(1)(a) shall be reduced in the taxable period in which the cancellation is recorded by the amount of tax accounted for on the deposit.”.

103 .— With effect from 1 July 2008 section 26 of the Principal Act is amended in subsection (3AA) by substituting “open market value” for “open market price”.

104 .— Section 27 of the Principal Act is amended in subsection (9A)—

(a) in the paragraph numbered (1)—

(i) by renumbering that paragraph as paragraph (a),

(ii) by renumbering as subparagraphs (i), (ii) and (iii), respectively, the subparagraphs designated as (a), (b) and (c), and

(iii) by deleting “or” in subparagraph (ii) (as so renumbered) and by inserting the following after that subparagraph:

“(iia) were acquired in another Member State and those goods are new means of transport in respect of which the acquirer—

(I) makes an intra-Community acquisition in the State,

(II) is not entitled to a deduction under section 12 in respect of the tax chargeable on that acquisition, and

(III) fails to account for the tax due on that acquisition in accordance with section 19,

or”,

(b) in the paragraph numbered (2)—

(I) by renumbering that paragraph as paragraph (b), and

(II) by substituting “paragraph (a)” for “subsection (1)”,

(c) in the paragraph numbered (3)—

(I) by renumbering that paragraph as paragraph (c), and

(II) by substituting “paragraph (b)” for “subsection (2)”,

and

(d) in the paragraph numbered (4)—

(I) by renumbering that paragraph as paragraph (d), and

(II) by renumbering as subparagraphs (i), (ii), (iii), (iv) and (v), respectively, the subparagraphs designated as (a), (b), (bb), (c) and (d).

105 .— Section 32 of the Principal Act is amended in subsection (1) with effect from 1 July 2008 by inserting the following after paragraph (ta):

“(tb) the operation of the capital goods scheme and in particular the duration of a subsequent interval where the accounting year of a capital goods owner changes;

(tc) the methods which may be used for the purposes of applying section 10(4D);”.

106 .— The First Schedule to the Principal Act is amended with effect from 1 July 2008 by deleting “to which section 3(1)(c) or 4 relates,” in paragraph (xxiv).

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

(a) with effect from 1 May 2008 by substituting “€37,500” for “€35,000”, in paragraphs (viib) and (viic),

(b) with effect from 1 March 2008 by inserting the following after paragraph (xid):

“(xie) miscanthus rhizomes, seeds, bulbs, roots and similar goods used for the agricultural production of bio-fuel;”,

and

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

“(xixa) non-oral contraceptive products;”.

108 .— (1) Subject to subsection (2), in each provision specified in column (1) of the Table to this section for the amount set out in column (2) of that Table at that entry there shall be substituted the amount set out at the corresponding entry in column (3) of that Table.

(2) Subsection (1) applies as respects an offence committed on a day after the passing of this Act.

TABLE

109 .— With effect from 1 July 2008 in each provision of the Principal Act specified in the first column of Schedule 4 for the words set out in the second column of that Schedule at that entry (in each place where those words occur in the provision concerned) there is substituted the words set out at the corresponding entry in the third column of that Schedule.