LOCAL VAT MEASURES FOR FOREIGN COMPANIES IN IRELAND
Ireland had simplification measures applicable up to 31/12/2019. If conditions were met, foreign companies were not required to register for VAT purpose locally.
Call-off stock as from 01/01/2020
Since 01/01/2020, thIe European simplification regime for call-off stock arrangements ("2020 Quick Fixes") entered into force and is to be applied by all Member States, inclusing Ireland.
Consignment stocks as from 01/01/2020
Ireland however decided to adopt additional simplification measure for "consignment stock". Consignment stock is a term used to describe a movement of goods by a supplier in one Member State to another Member state to be held in stock there and provided to customers as required. The goods remain under the control of the supplier and are not intented for any one known customer at the time of transport.
A non-established trader is not obliged to register for VAT where they send consignment stock from another European Union (EU) Member State to the State for use by an accountable person. The VAT will be accounted for by the accountable person as an intra-EU acquisition when the stock is drawn off. The warehouse keeper must, in all cases, be independent of the supplier.
It is therefore important to note the difference between call-of stock arrangements and consignment stock arrangements in Ireland.
Triangulation can be applied when the middleman (B) is VAT registered for others supplies in the 3rd country (Member State of destination)?
No
Triangulation regime ABC cannot be applied when the middleman B is also VAT registered in Ireland (Member State C).
Transactions involving more than three companies
The simplification measure can only operate in a classic triangulation situation. If there are more than three companies involved (for example, successive sales between companies in Member State 2), the strict legal position will apply. In such cases, registration may be required in at least one other Member State depending on the precise circumstances.
Optional reverse charge for supply of goods?
Reverse charge is not applicable to major supplies of goods [with the exception for supplies of goods with installation and some other specific items].
Optional reverse charge for supply of services
Yes [with some exceptions]
Optional reverse charge (art. 194 of the VAT Directive)
Member States in which the VAT is due may provide that the person liable for the payment of VAT is the person to whom the goods or services are supplied where the transaction is carried out by a taxable person who is not established in the country in which the VAT is due.
VAT Warehousing implemented in Ireland
Ireland has introduced VAT warehousing regime applicable under specific conditions.
VAT Directive
Member States may exempt the importation of goods and the supply of goods which are intended to be placed under warehousing arrangements other than customs warehousing.
Is it possible for a company to pay the import VAT via the periodical VAT return?
Postponed accounting via the VAT return is not possible in Ireland. Import VAT needs to be paid to the customs authorities upon importation [immediate payment]. A deferred payment for VAT and customs [similar delay] is however possible under specific conditions.
VAT DIrective
Member States may provide that VAT on importation does not need to be paid at the time of importation on condition that it is entered as such in the VAT return to be submitted.
VAT OBLIGATIONS IN IRELAND
How is the tax period determined in Ireland?
Monthly/Bi-Monthly/Tri-yearly/Bi-yearly/Yearly
Your company has to report its VAT position by filing periodical VAT returns on a two-monthly basis [2-month period - standard tax period]. Monthly reporting period can be opted for if your company is in a permanent repayment situation. Other tax periods are also available under specific conditions.
When should periodical VAT return be filed?
Periodical VAT return must be filed by electronic means via "ROS" to Irish VAT authorities before the 19th day of the month [19 of N+1] after the end of the tax period [monthly, bi-monthly, tri-annually, bi-annually or yearly] to which it relates.
If you both pay and file your return using ROS services the due date for your payment and return will be extended to the 23rd of the month following the tax period.
VAT Directive
The tax period shall be set by each Member State at one month, two months or three months. Member States may, however, set different tax periods provided those ones do not exceed one year. The VAT return shall be submitted by a deadline to be determined by Member States. That deadline may not be more than two months after the end of each tax period.
Your company has to file a yearly Statement [Return of Trading Details - RTD]. The RDT Form details purchases and sales for the year, broken by VAT rate. The statement should be filed by electronic means via "ROS" together with the last VAT return of the year.
VAT Directive
Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year. That return shall provide all the information necessary for any adjustments.
Are quarterly filings allowed by the country and what is the filing deadline?
The recapitulative statement [ESL - VIES return] must be drawn up for each calendar month. Taxpayers can however opt for filing the statement on a quarterly basis provided the intra-EU transactions do not exceed a quarterly threshold of € 50.000. VIES Return must be filed by electronic means via "ROS" to Irish VAT authorities before the 23th day of the month following the reporting period [month/quarter] to which it relates.
VAT Directive
The recapitulative statement shall be drawn up for each calendar month. However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency. The recapitulative statement shall be submitted within a period not exceeding one month.
What is the payment deadline?
The VAT due should be paid by filing deadline for the VAT return - no later than the 23rd day of the month after the end of the tax period to which it relates. Where VAT becomes payable but is not paid, simple interest is chargeable at the rate of 0,0274% per day, or part of a day during which the amount remains unpaid.
Are interim payments required?
Interim payments are not required in Ireland. However, taxpayers choosing to pay their VAT liability by way of direct debit instalments and filing annual VAT returns must pay monthly interim payments.
VAT Directive
Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. Member States may, however, set a different date for payment of that amount. Member States may require interim payment to be made.
Is any VAT credit automatically carried forward or refunded?
A VAT credit is directly refunded about three weeks after filing the return. No carry-forward mechanism. Irish VAT Act provides for payment of interest on refunds of VAT to a claimant in two circumstances, i.e. when there is a mistaken assumption in the operation of the tax made by Irish VAT authorities or where there is a delay of more than 93 days in processing a fully completed claim. The rate of interest is 0,011% per day.
VAT Directive
Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.
VAT OVERVIEW IN IRELAND
What is the local name of the tax?
Value Added Tax [VAT]
What is the structure of the VAT number?
Irish VAT numbers have 10 characters [IE + 1 alpha and 7 numeric or 2 alpha and 6 numeric].
VAT Directive
Member States must apply a standard VAT rate [not lower than 15%] which must be the same for the supply of goods and for the supply of services. Member States may apply either one or two reduced rates [not lower than 5%] only to supplies of goods or services as listed in the Annex III of the VAT Directive.
VAT rates
Ireland applies a standard VAT rate of 23% and three reduced VAT rates: 5%, 9% and 13,5%.
€ 35,000
see various thresholds applied in the EU
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