Finance Bill 2013: The VAT section

Wednesday, February 20, 2013

by Nick Ryan

A number of changes have been introduced covering a range of issues though with significant , and indeed complex changes to the rules in relation to property transactions. The latter has been covered separately but a summary of the other key changes are:

State bodies and the provision of sports facilities: This follows the Commencement Order signed by the Minister in October 2012 and confirms that the provision of sports facilities by State and public bodies i.e. local authorities will be taxable where the turnover for these services exceeds €37,500 per annum. The exemption will remain in place for the hiring of sports grounds such as running tracks and football pitches by a public body to a non-profit making cultural, sporting, social and community organisation but where these facilities are hired to either commercial entities or private individuals then, subject to the income threshold, they will be taxable. this change will be welcomed as another step taken to remove distortion of competition.

Cash receipts basis: This provides for a welcomed increase in the eligibility threshold for SME’s from €1m to €1.25m. This increase is effective from 1 May 2013.

Vouchers:This is an anti avoidance measure that provides for where vouchers are sold through intermediaries cross border. This now means that the retailer who processes the voucher is required to account for VAT on the value of the voucher on redemption.

Financial services: The changes here are in relation to providers of fund management services and relate to the entitlement to VAT deduction on operating costs. The purpose of the change is to align Irish legislation to the EU VAT Directive and refines the definition of a qualifying activity. From now on fund managers will no longer be able to base input VAT deductibility by reference to supplies outside the EU.

Other changes announced cover the application of electronic invoicing, see Revenue News update, February 2013.

If you have any questions on the above or would like to discuss a particular issue then please contact Nick at 0238838181 or advice@thevatpractice.ie

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