IRELAND: COVID-19 VAT IMPLICATIONS

IRELAND – update 24^th July

Ireland cuts VAT rate from 23 to 21%

Ireland announced a range of new measures to help businesses cope with the economic struggles due to the Covid-19 pandemic. The measures include a cut in the standard VAT rate from 23 to 21%. Businesses will also be able to delay payment of their PAYE and VAT for a period without incurring any penalties.

The measure will apply from 1 September 2020 until 28 February 2021.

Source Credit – Avalara

IRELAND – update 6^th July

Ireland COVID-19 tourism and hotels VAT cut?

Ireland is reviewing reducing its tourism and hospitality Value Add Tax rate from 13.5% to 9% to support the business during the coronavirus pandemic. Any announcement may come next week from the coalition party.

Countries such as Austria, Germany, Czech Republic have already moved to reduce VAT on the hospitality sector to recognise the effects of the closure of restaurants, cafes and hotels.

The UK may implement a similar cut next week then the Chancellor is to announce support for the hardest hit industries.

Ireland has last cut its tourism VAT rate between 2009 and 2019 following the financial crisis.

Source Credit – Richard Asquith – (Avalara)

IRELAND – update 2^nd June

Temporary measures in relation to the close company surcharge

The close company surcharges apply to income of close companies that is not distributed within 18 months from the end of the accounting period in which the income arose. In cases where a distribution is not made within that time in response to Covid-19 circumstances affecting the company, Revenue will, on application, extend the 18-month period for distributions by a further 9 months.
Tax and Duty Manual Part 13-02-05 has been amended to include reference to such extensions and the action to be taken on receipt of an application for an extension.
 
Source Credit – Revenue.ie
 

IRELAND – update 25^th May

Charities VAT Compensation Scheme – extension to closing date for submitting claims

In response to the impact of the Covid-19 pandemic on the operation of business, the closing date for submission of claims under the VAT Compensation Scheme has been extended this year, from 30 June 2020 to 31 August 2020. This is a temporary measure and applies to claims submitted in respect of eligible VAT paid by charities in 2019. Charities are encouraged, however, to continue to submit their claims as early as possible via Revenue’s Online Service (ROS).

The Tax and Duty Manual VAT Compensation Scheme Guidelines makes reference to this temporary measure and further information about the Scheme is available on the Revenue website.

Source Credit – Revenue.Ie

IRELAND – update 11^th May

The application of the Capital Goods Scheme and the VAT treatment of Donations or Gifts of goods or meals

The guidance note ‘Temporary zero rating of supplies of medical equipment for the treatment of patients with Covid-19’ has been updated.

The application of the Capital Goods Scheme relating to the supply of emergency accommodation and the VAT treatment of donations or gifts of goods or meals supplied in the response to the Covid-19 crisis are set out in the guidance note.

Source Credit – Revenue.Ie

IRELAND – update 24^th April

Temporary VAT zero rating of supplies of personal protective equipment, ventilators and other medical products

This is an important notice for taxpayers and agents regarding the temporary VAT zero rating of supplies of personal protection equipment, ventilators and other medical products when supplied to the HSE, hospitals, nursing homes, and other healthcare facilities for use in the delivery of Covid-19 related health care services to their patients.

This concessional tax treatment will apply from 9 April 2020 up to 31 July 2020, subject to review.

Source Credit – Revenue (Irish tax and Customs)

IRELAND – update 17^th April

Affected businesses advised to continue to file tax returns on time; for SMEs, suspension of interest on late payment penalty fees for January and February 2020; businesses other than SMEs can also request support; and critical pharmaceutical products and medicines will be given a Customs ‘green routing’.

Source Credit – Accordance VAT

IRELAND – update 4^th April

Extension on late VAT (COVID-19) payments includes April instalments

The Irish Revenue Commission has announced Value Added Tax measures to help business with cashflow issues arising from the coronavirus Covid-19 pandemic.

It has suspended VAT liabilities enforcement activities. There will be automatic no late interest or payment penalties for January-February VAT payments for small businesses below €3million annual turnover. Larger businesses must contact the Revenue for delays on their payments. However, VAT returns must still be filed on time. The Revenue has advised businesses in trouble to contact it to negotiate payment terms.

Source credit – Richard Asquith (Avalara)

IRELAND – Update 31st March

• Interest on late payments by small and medium enterprise (SME) businesses is suspended for January/February VAT and both February and March PAYE (Employers) liabilities.
• The application of a surcharge for corporation tax returns for accounting periods ending 30 June 2019 onwards is suspended until further notice.
• Filing deadlines and notification periods are extended in respect of certain payroll obligations.
• The Temporary COVID-19 Wage Subsidy Scheme operates as a refund to employers who will continue to pay employees normal take home pay, capped at €410 per week.
• All debt enforcement activity is suspended until further notice.
• Audit and compliance intervention activity on taxpayers’ premises is suspended until further notice.
• Current tax clearance status will remain in place over the coming months.
• In determining corporate tax residence status
  • the presence of an individual in Ireland or another jurisdiction due to COVID-19 travel restrictions, will be disregarded by Revenue for a company in relation to which the individual is an employee, director, service provider or agent.
• No Benefit in Kind (BIK) will apply to travel expenses and the provision of equipment to employees to facilitate home working during the COVID-19 period.
• Deduction date for Local Property Tax (LPT) extended to 21 May 2020 for property owners paying by direct debit.
• Deduction date for stamp duty and credit cards extended to 1 July 2020.
  • Banks, retail credit and credit servicing firms have introduced three month payment breaks on mortgages, personal loans and business loans for those affected by COVID-19.
• COVID 19 2020 Act prevents the termination of residential tenancies and rent increases for an initial period of 3 months.
• Deferral of commercial rates payable to Local Authorities until end of May.

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