Value Added Tax (Amendment) Act 1978

1 Principal Act.

1.—In this Act “the Principal Act” means the Value-Added Tax Act, 1972.

2 Amendment of section 1 of Principal Act.

2.—Section 1 of the Principal Act is hereby amended by—

(a) the deletion of the definitions of “accountable person”, “established”, “manufacturer”, “rendering” and “residing”;

(b) the substitution of “‘establishment’” for “‘permanent establishment’”, and

(c) the insertion of the following definitions:

“‘agricultural produce’ has the meaning assigned to it by section 8;”,

“‘agricultural service’ has the meaning assigned to it by section 8;”,

“‘Community’ means the European Economic Community;”

“‘farmer’ has the meaning assigned to it by section 8;”,

“‘flat-rate addition’ has the meaning assigned to it by section 12A;”.

“‘flat-rate farmer’ has the meaning assigned to it by section 12A;”.

“‘supply’, in relation to goods, has the meaning assigned to it by section 3 and, in relation to services, has the meaning assigned to it by section 5, and cognate words shall be construed accordingly;”, and

“‘taxable person’ has the meaning assigned to it by section 8;.”

3 Amendment of section 2 of Principal Act.

3.—Section 2 (1) of the Principal Act is hereby amended by the substitution for paragraph (a) of the following paragraph:

“(a) on the supply of goods and services effected within the State for consideration by a taxable person in the course or furtherance of any business carried on by him, and”.

4 Amendment of section 3 of Principal Act.

4.—Section 3 of the Principal Act is hereby amended—

(a) by the substitution in subsection (1) of “In this Act ‘supply’, in relation to goods, means—” for “In this Act ‘delivery’, in relation to goods, shall, subject to subsection (1A), include—”, and of the following paragraphs for paragraphs (e) and (f):

“(e) the application (otherwise than by way of disposal to another person) by a person for the purposes of any business carried on by him of the goods, being goods which were developed, constructed, assembled, manufactured, produced, extracted, purchased or imported by him or by another person on his behalf, except where tax chargeable in relation to the application would, if it were charged, be wholly deductible under section 12, and

(f) the appropriation by a taxable person for any purpose other than the purpose of his business or the disposal free of charge of the goods where tax chargeable in relation to the goods—

(i) upon their acquisition by the taxable person, if they had been so acquired, or

(ii) upon their development, construction, assembly, manufacture, production, extraction, importation or application under paragraph (e),

as the case may be, was wholly or partly deductible under section 12,”,

(b) by the substitution of the following subsection for subsection (1A):

“(1A) Anything which is a supply of goods by virtue of paragraph (e) or (f) of subsection (1) shall be deemed, for the purposes of this Act, to have been effected for consideration in the course or furtherance of the business concerned:

Provided, however, that the following shall not be deemed to have been effected for consideration, that is to say:

(a) a gift of goods made in the course or furtherance of the business (otherwise than as one forming part of a series or succession of gifts made to the same person) the cost of which to the donor does not exceed a sum specified for that purpose in regulations,

(b) the gift, in reasonable quantity, to the actual or potential customer, of industrial samples in a form not ordinarily available for sale to the public.”,

(c) by the insertion of the following subsection:

“(1B) The provision of electricity, gas and any form of power, heat, refrigeration or ventilation shall be deemed, for the purposes of this Act, to be a supply of goods and not a supply of services”, and

(d) by the substitution for subsection (3) of the following subsection:

“(3) (a) The supply by auction of goods being—

(i) livestock, horses, greyhounds, vegetables, fruit, flowers, poultry, eggs or fish, or

(ii) immovable goods supplied in circumstances in which tax is not chargeable,

shall be deemed, for the purposes of this Act, to constitute a supply of the goods to and simultaneously by the auctioneer.

(b) The supply through an estate agent or other agent of—

(i) livestock, horses or greyhounds, or

(ii) immovable goods supplied in circumstances in which tax is not chargeable,

shall be deemed, for the purposes of this Act, to constitute a supply of the goods to and simultaneously by the agent.”.

5 Supply of services.

5.—The following section shall be substituted for section 5 of the Principal Act:

“5. (1) In this Act ‘supply’, in relation to a service, means the performance or omission of any act or the toleration of any situation other than the supply of goods and other than a transaction specified in section 3 (5).

(2) The provision of food and drink, of a kind specified in paragraph (xii) of the Second Schedule, in a form suitable for human consumption without further preparation—

(a) by means of a vending machine,

(b) in the course of operating a hotel, restaurant, cafe, refreshment house, canteen, establishment licensed for the sale for consumption on the premises of intoxicating liquor, catering business or similar business, or

(c) in the course of operating any other business in connection with the carrying on of which facilities are provided for the consumption of the food or drink supplied,

shall be deemed, for the purposes of this Act, to be a supply of services and not a supply of goods.

(3) Any of the following shall, if so provided by regulations, and in accordance therewith, be deemed, for the purposes of this Act, to be a supply of services by a person for consideration in the course or furtherance of his business—

(a) the use of goods forming part of the assets of his business for purposes other than those of his business,

(b) the supply by him of services for his own private or personal use and the supply by him of services free of charge for the private or personal use of his staff or for any purposes other than those of his business,

(c) the supply of services for his own private or personal use or that of his staff, for the supply of which he provides materials or facilities or towards the cost of which he contributes in whole or in part,

(d) the supply by him of services, other than those referred to in the preceding paragraphs of this subsection, for the purposes of his business except where tax on such services, if it were chargeable, would be wholly deductible under section 12.

(4) The supply of services through a person (in this subsection referred to as the agent) who, while purporting to act on his own behalf, concludes agreements in his own name but on the instructions of and for the account of another person, shall be deemed, for the purposes of this Act, to constitute a supply of the services to and simultaneously by the agent.

(5) Subject to subsections (6) and (7), the place where a service is supplied shall be deemed, for the purposes of this Act, to be the place where the person supplying the service has his establishment or (if more than one) the establishment of his which is most concerned with the supply or (if he has no establishment) his usual place of residence.

(6) (a) The place of supply of services connected with immovable goods, including the services of estate agents, architects and firms providing on-site supervision in relation to such goods, shall be deemed, for the purposes of this Act, to be the place where the goods are situated.

(b) Transport services shall be deemed, for the purposes of this Act, to be supplied where the transport takes place.

(c) The following services shall be deemed, for the purposes of this Act, to be supplied where they are physically performed:

(i) cultural, artistic, sporting, scientific, educational, entertainment or similar services,

(ii) ancillary transport activities such as loading, unloading and handling,

(iii) valuation of movable goods,

(iv) work on movable goods.

(d) The place of supply of services consisting of the hiring out of movable goods (other than means of transport) which are exported by the person from whom they are hired from one member State of the Community with a view to their being used in another such member State shall be deemed, for the purposes of this Act, to be the place of utilisation.

(e) The place of supply of services of any of the descriptions specified in the Fourth Schedule shall be deemed, for the purposes of this Act, to be—

(i) in case they are received, otherwise than for a business purpose, by a person whose usual place of residence is situated outside the Community, the place where he usually resides,

(ii) in case they are received by a person who has no establishment in the country in which, but for this subparagraph, the services would be deemed to be supplied and are so received for the purposes of any business carried on by him, the place where he has his establishment or (if more than one) the establishment of his at which or for the purposes of which the services are most directly used or to be used or (if he has no establishment anywhere) the place where he usually resides,

(iii) in any other case, the place specified in subsection (5) that is appropriate to the circumstances.

(7) Provision may be made by regulations for varying, in relation to services generally or of a description specified therein, the rules for determining their place of supply, and for that purpose the Fourth Schedule may be added to or varied.

(8) The transfer of the goodwill or other intangible assets of a business, in connection with the transfer of the business or part thereof, to another taxable person shall be deemed, for the purposes of this Act, not to be a supply of services.”.

6 Amendment of section 8 of Principal Act.

6.—Section 8 of the Principal Act is hereby amended by the substitution of the following subsections for subsections (1), (2), (3), (7), (8) and (9):

“(1) A person who, otherwise than as an employee of another person, engages in the supply, within the State, of taxable goods or services in the course of business shall, in addition to the persons referred to in section 4 (5) and subsections (2) and (2A), be a taxable person and shall be accountable for and liable to pay the tax charged in respect of such supply.

(2) Where by virtue of section 5 (6) (e) (ii) a taxable service that, apart from that provision, would be treated as supplied abroad, is deemed to be supplied in the State, the person who receives the service shall, in relation thereto, be a taxable person and be liable to pay the tax charged as if he had himself supplied the service for consideration in the course or furtherance of his business.

(2A) (a) The Minister may, following such consultations as he may deem appropriate, by order provide that the State and every local authority shall be taxable persons with respect to specified categories of supplies made by them of goods or services and, accordingly, during the continuance in force of any such order, but not otherwise, the State and every local authority shall be accountable for and liable to pay tax in respect of any such supplies made by them as if the supplies had been made in the course of business.

(b) The Minister may by order amend or revoke an order under this subsection, including an order under this paragraph.

(c) An order under this subsection shall be laid before Dáil Éireann as soon as may be after it is made and, if a resolution annulling the order is passed by Dáil Éireann within the next twenty-one days on which Dáil Éireann has sat after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

(3) The following persons shall, not, unless they otherwise elect and then only during the period for which such election has effect, be taxable persons—

(a) a farmer,

(b) a person whose supplies of taxable goods or services consist exclusively of—

(i) supplies to taxable persons and persons to whom section 13 (3) applies of fish (not further processed than gutted, salted and frozen) which he has caught in the course of a sea-fishing business,

(ii) supplies of machinery, plant or other equipment which have been used by him in the course of a sea-fishing business, and

(iii) supplies of goods and services, other than those referred to in subparagraphs (i) and (ii), the total consideration for which has not exceeded and is not likely to exceed £3,000 in any period consisting of 6 consecutive taxable periods,

(c) (i) subject to subparagraph (ii), a person for whose supply of taxable goods and services the total consideration has not exceeded and is not likely to exceed £3,000 in any taxable period,

(ii) subparagraph (i) shall apply if, but only if, not less than 90 per cent. of the total consideration referred to therein is derived from the supply of taxable goods which the person has imported or which have been supplied to him by other taxable persons or which, being goods of a kind chargeable with tax at the rate of zero per cent., were supplied to him by persons other than taxable persons and not less than 50 per cent, of such consideration is derived from the supply of goods and services chargeable with tax at either of the rates for the time being specified in paragraph (a) or (b) of section 11 (1),

(d) (i) subject to subparagraph (ii), a person for whose supply of taxable goods and services the total consideration has not exceeded and is not likely to exceed £1,500 in any taxable period,

(ii) subparagraph (i) shall apply if, but only if, not less than 90 per cent. of the total consideration referred to therein is derived from the supply of taxable goods,

(e) a person, other than a person to whom paragraph (a), (b), (c) or (d) applies, for whose supply of taxable goods and services the total consideration has not exceeded and is not likely to exceed £500 in any taxable period.

(7) Where any goods or services are provided by a club or other similar organisation in respect of a payment of money by any of its members, then, for the purposes of this Act, the provision of the goods or services shall be deemed to be a supply by the club or other organisation of the goods or services (as the case may be) in the course or furtherance of a business carried on by it and the money shall be deemed to be consideration for the supply.

(8) Provision may be made by regulations whereby, if the Revenue Commissioners are satisfied that the business activities of two or more taxable persons are so interlinked that it would be expedient, in the interest of efficient administration of the tax to do so, then at the request of the taxable persons concerned—

(a) those activities may be deemed, for the purpose of this Act, to be carried on by any one of the persons and all transactions by or between such persons shall be deemed, for those purposes, to be transactions by that one person and all other rights and obligations under this Act shall be determined accordingly, and

(b) each such person may be made jointly and severally liable to comply with all the provisions of this Act and regulations (including the provisions requiring the payment of tax) that apply to those persons and subject to the penalties under this Act to which they would be subject if each such person was liable to pay to the Revenue Commissioners the whole of the tax chargeable, apart from regulations under this subsection, in respect of all such persons.

(9) In this Act—

‘agricultural produce’ means, in relation to a farmer, goods, other than live horses and live greyhounds, produced by him in the course of an Annex A activity;

‘agricultural service’ means, in relation to a farmer, any Annex B service supplied by him using his own labour or that of his employees or effected by means of machinery, plant or other equipment normally used for the purposes of an Annex A activity carried on by him;

‘Annex A activity’ means any activity of a description specified in Annex A (which is set out in Part I of the Fifth Schedule) of Council Directive No. 77/388/EEC of 17 May, 1977 (OJ No. L145/1 13. 6. 1977);

‘Annex B service’ means any service of a description specified in Annex B (which is set out in Part II of the Fifth Schedule) of the said Council Directive;

‘farmer’ means a person who engages in at least one Annex A activity and whose supplies of taxable goods and services in the course of business consist exclusively of—

(a) supplies of agricultural produce,

(b) supplies of agricultural services,

(c) supplies of machinery, plant or other equipment which has been used by him for the purposes of an Annex A activity, and

(d) supplies of goods and services, other than those referred to in paragraphs (a), (b) and (c), the total consideration for which has not exceeded and is not likely to exceed £3,000 in any period consisting of six consecutive taxable periods.”.

7 Amendment of section 9 of Principal Act.

7.—Section 9 of the Principal Act is hereby amended by the substitution of the following subsection for subsection (1):

“(1) The Revenue Commissioners shall set up and maintain a register of persons who may become or who are taxable persons.”.

8 Amount on which tax is chargeable.

8.—The following section shall be substituted for section 10 of the Principal Act:

“10. (1) The amount on which tax is chargeable by virtue of section 2 (1) (a) shall, subject to this section, be the total consideration which the person supplying goods or services becomes entitled to receive in respect of or in relation to such supply of goods or services, including all taxes, commissions, costs and charges whatsoever, but not including value-added tax chargeable in respect of the supply.

(2) If the consideration referred to in subsection (1) does not consist of or does not consist wholly of an amount of money, the amount on which tax is chargeable shall be the total amount of money which might reasonably be expected to be charged if the consideration consisted entirely of an amount of money equal to the open market price:

Provided that in computing the amount on which tax is chargeable as aforesaid a deduction may be made for the open market price of second-hand movable goods given in exchange or part exchange for goods, whether new or second-hand, of the same kind.