S.I. No. 327/2021 - European Union (Value-Added Tax) Regulations 2021

These Regulations transpose into Irish VAT law Council Directive (EU) 2017/2455 of 29 December 2017²⁰ (as amended by Council Decision 2020/1109 of 20 July 2020²¹ ), and Council Directive 2019/1995 of 21 November 2019²² (as amended by Council Decision 2020/1109 of 20 July 2020²³ . These Regulations also give further effect to Council Directive (EU) 2018/1910 of 4 December 2018²⁴

Council Directives (EU) 2017/2455 and 2018/1910 (as amended) amend the EU VAT Directive (2006/112/EC) to expand the scope of supplies which may be accounted for using the Union and non-Union schemes within the VAT One Stop Shop (previously the VAT Mini One Stop Shop). The EU VAT Directive has also been amended by these Directives to create the Import One Stop Shop (Import Scheme), the Special Arrangements for VAT on Import (Special Arrangements), and to introduce a new deeming provision in respect of supplies facilitated by electronic interfaces.

Transposition is effected by way of amendment of the Value-Added Tax Consolidation Act 2010 (the Act). Regulations 4 to 30 amend sections 2, 5, 6, 30, 32A, 33, 34, 66, 74, 76, 91A, 91B, 91C, 91D, 91E, 91F, 101, 102, 111, 115, 116, 120, Schedule 2 and Schedule 9 of the Act, and insert the new sections 35A, 91G, 91H, 91I, 91J and 91K into the Act. These amendments will come into force from 1 July 2021.

An explanation of the Regulations is set out below.

Regulation 1 gives the citation and title of the Regulations.

Regulation 2 sets out the date of coming into effect of the Regulations.

Regulation 3 defines, for the purposes of these Regulations, the Act of 2010 as meaning the Value-Added Tax Consolidation Act 2010 .

Regulation 4 amends section 2 of the Act by inserting the new definitions “intra-Community distance sales of goods” and “distance sales of goods imported from third territories or third countries”.

Regulation 5 contains a consequential amendment to section 5(1) of the Act to insert a reference to section 91J(10).

Regulation 6 includes a consequential amendment to section 6 of the Act which is required as a result of the changes made to section 30 in Regulation 7 below.

Regulation 7 substitutes a new section in place of the existing section 30. Section 30 sets out the place of supply rules for intra-Community distance sales of goods and distance sales of goods imported from third territories and third countries.

Regulation 8 amends section 32A of the Act, which relates to chain transactions, and provides that where a deemed supplier is the supplier of goods, it is not possible for the provision relating to chain transactions to apply to that supply.

Regulation 9 amends section 33 by the deletion of subsection (4B). It is a consequential amendment required as a result of the deletion of paragraph (kd) in section 34 by Regulation 10 below.

Regulation 10 contains an amendment of section 34. Paragraph (kd) of that section is deleted, while paragraph (kc) is amended to replace the reference to paragraph (kd) in that paragraph with a reference to section 35A, as inserted by Regulation 11.

Regulation 11 amends Part 4 of the Act by inserting a new Chapter 4, which contains a new section 35A. Section 35A sets out place of supply rules for some suppliers who make supplies of intra-Community distance sales of goods and supplies of telecommunication services, radio or television broadcasting services or electronically supplied services (TBE services).

Subsections (1) and (2) provide that a supplier who makes such supplies from the State to non-taxable persons resident in other Member States, and the value of the goods and services supplied in one year is less than the threshold of €10,000, section 29(1)(a) will apply to the intra-Community distance sales of goods, and section 34(b) will apply to the supply of TBE services. This means that the place of supply rules which will apply are those which would apply to a domestic supply of goods and services, and as such the VAT due on those supplies will be accounted for in the State.

Subsection (3) of that section provides that where the €10,000 is exceeded in a calendar year, the place of supply rules contained in sections 30(a) and section 34(kc) will apply to those sales from the date on which the threshold is exceeded.

Subsection (4)(a) provides that a person who has not exceeded the €10,000 threshold may opt for the place of supply rules contained in section 30(a) and section 34(kc) to apply to sales which he or she makes. Where a person opts for those sections to apply to intra-Community distance sales of goods or supplies of TBE services which he or she makes, subsection (4)(b) provides that such a decision will apply for a period not less than 2 years from the date on which the option is exercised.

Regulation 12 amends section 66(1)(a)(ii) to provide that a taxable person must issue an invoice where a supply is deemed to have taken place in another Member State, except where the Union scheme is used to declare and pay the VAT due on the goods.

Regulation 13 amends section 74(1) to specify that the time at which payment is accepted is the time at which tax is chargeable where a supply of goods is made by an electronic interface who is the deemed supplier of the goods under section 91G.

Regulation 14 amends section 76(1) to include a reference to section 91K(3) in that subsection.

Regulation 15 inserts a new title for Chapter 2 of Part 10 of the Act.

Regulation 16 amends a number of definitions contained in section 91A, and also inserts a number of new definitions into that section.

The definitions “Implementing Regulation”, “Member State of consumption”, “Member State of identification”, “non-Union scheme”, “scheme services”, “Union scheme” and “VAT return” have been amended in order to provide for the increased scope of the OSS and the introduction of the Import Scheme, the deeming of electronic interfaces and the Special Arrangements for VAT on Import.

The definitions “import scheme”, “intrinsic value”, “qualifying domestic supply of goods”, “taxable person not established in the Community” and “taxable person not established in the Member State of Consumption” are also inserted by this regulation. These definitions apply to all of Chapter 2 of Part 10 of the Act.

Regulation 17 amends section 91B, where the State is the Member State of identification for the non-Union scheme, to provide for the increased scope of the non-Union scheme within the One Stop Shop.

Paragraph (a) amends subsection (1)(b)(i) to allow for the use of the non-Union scheme in the State and the Union scheme in another Member State.

Paragraph (b) amends subsection 7(a) to set out the new date by which returns are required to be made. It is also amended by changing a reference from section 34(kc) to the relevant chapters of the Act.

Paragraph (c) inserts a new subsection (10A) which sets out the rules pertaining to deductibility where a person makes use of the non-Union scheme.

Paragraph (d) substitutes a new subsection (11). This substituted subsection sets out the conditions under which corrections to a previously made VAT return may be submitted and what information this correction is to contain.

Regulation 18 amends section 91C, where the State is the Member State to which supplies of services is made under the non-Union Scheme.

Paragraph (a) contains a consequential amendment to subsection (1) to reflect the amendment made to section 34 and associated insertion of Chapter 3 of Part 4.

Paragraphs (b) and (c) amend the dates contained in subsections (3) and (4) respectively.

Paragraph (d) amends subsection (6)(b) to set out the rules relating to deductibility for a supplier making supplies to the State.

Regulation 19 amends section 91D, where the State is the Member State of identification for the Union scheme, to provide for the extended scope of the Union scheme within the One Stop Shop.

Paragraph (a) amends subsection (1) to provide for the persons who may use the Union scheme, and to allow for the use of the non-Union scheme and the Union scheme simultaneously.

Paragraph (b) amends subsection (3) to provide that the date on which supplies under the Union scheme have commenced must be provided to the Revenue Commissioners.

Paragraph (c) amends subsection (4) by inserting new paragraphs (c) and (d) to provide that where a taxable person chooses the State as the Member State of Identification, that decision has effect for the remainder of the year in question and a further period of 2 years.

Paragraph (d) amends subsection (7) to provide that a taxable person registered for the Union scheme must submit a VAT return by the end of the month following a calendar quarter, and remit the VAT due on supplies made under the scheme. A VAT return must be made even if no supplies have been made during that quarter.

Paragraph (e) amends subsection (8) to provide that the VAT return made under subsection (7) must be made in euro and sets out the details of what is to be included in the VAT return.

Paragraph (f) amends subsection (11) to set out the conditions under which corrections to a previously made VAT return may be submitted and what information this correction is to contain.

Regulation 20 amends section 91E, where Ireland is the Member State of consumption for the purposes of the Union scheme. The amendments contained in paragraphs (a) to (f) are required in order to account for the increase scope of transactions which may be declared using the Union scheme and to reflect the change of dates on which returns and remittances are to be made under the Union scheme.

Regulation 21 amends section 91F to provide that regulations may be made in relation to the Union scheme and the non-Union scheme, as well as the Special Arrangements, the Import Scheme and the deeming provision for electronic interfaces.

Regulation 22 inserts sections 91G, 91H, 91I, 91J and 91K into the Act.

Section 91G transposes the provisions of the Directive relating to the deeming of electronic interfaces to be the suppliers of goods in certain circumstances.

Subsection (1) describes the circumstances in which an electronic interface will be the deemed supplier of goods imported into the EU (paragraph (a)) and goods that are in free circulation within the EU and the underlying supplier of the goods is not established in the EU (paragraph (b)).

Subsection (2) provides that the transport of goods where an electronic interface is deemed to have supplied goods is ascribed to the supply made by the deemed supplier.

Subsection (3) sets out the record keeping responsibilities of a deemed supplier,

Subsection (4) sets out the record keeping responsibilities of an electronic interface who facilitates the sale of goods and services. These record keeping responsibilities apply even where an electronic interface is not the deemed supplier of goods. The records must be sufficiently detailed to enable VAT to be verified, must be made available to the Revenue Commissioners and Member States in which the transactions are taxable on request, and must be retained for a period of 10 years from 31 December of the year in which the transaction was carried out.

Section 91H transposes the provisions of the Directive relating to the Special Arrangements for VAT on Import.

Subsection (1) defines the Special Arrangements for the purposes of the section.

Subsection (2) sets out the circumstances in which the Special Arrangements may be used.

Subsection (3) contains the conditions which must be fulfilled by a taxable person in order to use the special arrangements.

Subsection (4)(a) provides that where the Special Arrangements are used, the person to whom the goods are destined remains liable for the VAT due. Subsection (4)(b) also provides that the person using the Special Arrangements is to collect and pay the VAT due to the Revenue Commissioners.

Subsection (5) specifies that where goods are declared through the Special Arrangements, the VAT rate which will apply is the standard rate of VAT. This is regardless of the rate of VAT which would otherwise apply to the goods.

Subsection (6) sets out the manner in which information is to be provided to the Revenue Commissioners by a user of the Special Arrangements each month.

Subsection (7) specifies the information to be contained in a declaration made to the Revenue Commissioners for the purposes of the Special Arrangements.

Subsection (8) contains the record keeping obligations which a user of the Special Arrangements must fulfil.

Section 91I contains interpretation and general provisions relating to the Import Scheme contained in the eCommerce Package.

Subsection (1) defines the terms “intermediary”, “Member State of consumption”, “Member State of identification” and “VAT return” for the purposes of the Import Scheme as contained in sections 91I, 91J and 91K of the Act.

Subsection (2) provides that if a taxable person or an intermediary acting on behalf of a taxable person has more than one fixed establishment in the Community, the decision in respect of the Member State of identification which that taxable person or intermediary makes for the purposes of the Import Scheme has effect for the remainder of the year concerned and an additional period of 2 years.

Subsection (3) sets out the goods to which the Import Scheme may apply.

Subsection (4) details the taxable persons who may use the Import Scheme, and whether a taxable person must appoint an intermediary in order to use the Import Scheme.

Subsection (5) provides that where a person uses the Import Scheme, it must be used to declare all supplies which are within scope of the Import Scheme.

Subsection (6) states that a person may not appoint more than one intermediary at any one time.

Subsection (7) holds that where goods are supplied under the Import Scheme, goods are regarded as having been supplied at the time payment is accepted. VAT is then chargeable at the time of the supply.

Section 91J sets out how the Import Scheme operates where the State is the Member State of identification for the purposes of the scheme.

Subsection (1) provides that where a person or an intermediary acting on behalf of a person must notify the Revenue Commissioners where activity commences under the Import Scheme, or where activity changes such that the person or the intermediary no longer meets the conditions associated with using the Import Scheme.

Subsection (2) holds that a person may not be registered in the State for the purposes of the Import Scheme if that person is registered for the scheme in another Member State or that person has been excluded from the scheme.

Subsection (3) obliges the Revenue Commissioners to create an import scheme identification register for the Import Scheme. This register will be used in order to record persons identified in the State for the purposes of the scheme.

Subsection (4) sets out the information a taxable person not using an intermediary is to provide the Revenue Commissioners before that person commences use of the Import Scheme.

Subsection (5) sets out the information a person seeking to become an intermediary is to provide the Revenue Commissioners before that person commences use of the Import Scheme on behalf of a taxable person.

Subsection (6) sets out the information an intermediary is to provide the Revenue Commissioners on behalf of a taxable person before that taxable person commences use of the Import Scheme.

Subsection (7) mandates that a taxable person or an intermediary acting on his or her behalf must notify the Revenue Commissioners of any changes in the information provided under subsections (4) to (6).

Subsection (8) sets out the process which will be followed where a taxable person (paragraph (a)) or an intermediary acting on behalf of a taxable person (paragraph (b)) submits the information required under subsections (4) to (6) (as appropriate) to the Revenue Commissioners.

Where the information is received, the taxable person or intermediary will be registered on the import scheme identification register, be allocated an identification number and be notified of the number and the date on which the registration will go live. An intermediary will be allocated an identification number in respect of each taxable person which he or she represents.

Paragraph (c) specifies that an identification number issued can only be used for the purposes of the Import Scheme.

Subsection (9) sets out the circumstances in which a taxable person or an intermediary will be removed from the identification register for the Import Scheme.

Under paragraph (a), a taxable person who does not use an intermediary will be removed from the register where:

• • the Revenue Commissioners are notified that supplies under the Import Scheme are no longer made,

• • the taxable person no longer meets the conditions associated with the Import Scheme,

• • the taxable person persistently fails to comply with the rules of the scheme, or

• • the Revenue Commissioners can assume the taxable person’s supplies have ceased.

Under paragraph (b), an intermediary will be removed from the register where:

• • the intermediary has not acted on behalf of a taxable person for two consecutive calendar quarters,

• • the intermediary no longer meets the conditions associated with acting as an intermediary, or

• • the intermediary persistently fails to comply with the rules of the scheme,

Under paragraph (c), a taxable person who uses an intermediary will be removed from the register where:

• • the Revenue Commissioners are notified by the intermediary that supplies under the Import Scheme are no longer made,

• • the taxable person no longer meets the conditions associated with the Import Scheme,

• • the intermediary notifies the Revenue Commissioners that he or she no longer represents the taxable person,

• • the taxable person persistently fails to comply with the rules of the scheme, or

• • the Revenue Commissioners can assume the taxable person’s supplies have ceased.

Subsection (10) provides that the Revenue Commissioners may issue a notice to an intermediary and a taxable person which that intermediary represents holding that intermediary jointly and severally liable for supplies made under the Import Scheme. The Revenue Commissioners may issue such a notice for the protection of the revenue.

Subsection (11) obliges a taxable person or his or her intermediary to submit a VAT return for the purposes of the Import Scheme by the end of the month following a taxable period, and to remit the VAT due on supplies made under the Import Scheme. Paragraph (b) provides that a VAT return must be made even if no supplies have been made for that month.

Subsection (12) provides that the VAT return made under subsection (11) must be made in euro and sets out the details of what is to be included in the VAT return.

Subsection (13) describes the exchange rate to be used where supplies made under the Import Scheme are not made in the euro.

Subsection (14) provides that a correction may be made to a previously submitted VAT return in a subsequent return within 3 years of the original return being submitted. Paragraph (b) details the information to be provided where such a correction is being made.

Subsection (15) holds that a taxable person may not make a deduction in the VAT return to be submitted for the purposes of the Import Scheme.

Subsections (16) and (17) provide that the Revenue Commissioners will issue an electronic reminder in relation to an outstanding VAT return or payment to a taxable person or an intermediary on the 10^th day after:

• • the date on which a VAT return was to be submitted, or

• • a VAT return is received but partial or no payment has been made.

Subsection (18) contains the record keeping obligations which taxable persons and intermediaries must adhere to under the Import Scheme. The records must be sufficiently detailed to enable the Member State of consumption to verify that the VAT return is correct, must be made available to the Revenue Commissioners and Member States in which the transactions are taxable on request, and must be retained for a period of 10 years from 31 December of the year in which the transaction was carried out.

Section 91K sets out the manner in which the Import Scheme operates where the State is the Member State of consumption to which goods are supplied.

Subsection (1) provides that a person who is registered for the Import Scheme in the State or in another Member State, is an accountable person in relation to goods supplied in the State under the Import Scheme.

Subsections (2), (3) and (4) provide that a person who is registered for the Import Scheme in another Member State and who, in accordance with the provisions of the scheme in that other Member State, files a return and pays the tax due in the State, will be regarded as having fulfilled his or her obligations in relation to registration, returns and payments under the VAT Consolidation Act 2010. The returns and payments made under the provisions of the Import Scheme will be regarded as if they were returns and payments which were required to be made under the normal return and payments provisions of the Act.

Subsection (5) deals with the exchange rate to be applied where supplies are not made in the euro in the Import Scheme.

Subsection (6) deals with the entitlement to deduct VAT for taxable persons registered for the Import Scheme.

Subsection (7) deals with record keeping requirements.

Regulation 23 contains a consequential amendment to section 101(14)(a). This amendment inserts a reference to goods supplied under the Import Scheme which are taxable in the State.

Regulation 24 contains a consequential amendment to section 102(3)(b). This amendment inserts a reference to goods supplied under the Import Scheme which are taxable in the State.

Regulation 25 amends section 111(1) to insert references to section 91J(10) throughout that section.

Regulation 26 amends section 115(1) to provide that paragraph (a) of that section will not apply to an intermediary where that intermediary is jointly and severally liable under section 91J(10).

Regulation 27 amends section 116 to provide that the section will not apply to an intermediary where that intermediary is jointly and severally liable under section 91J(10).

Regulation 28 amends section 120 of the Act. Paragraph (a) contains an amendment to subsection (4) which is consequential to the changes made to section 30 and the associated insertion of section 35A. Paragraph (b) contains an amendment to subsection (10) to provide that the Revenue Commissioners may make Regulations to provide for the manner in which the Import Scheme, and the Special Arrangements operate.

Regulation 29 amends Part 1 of Schedule 2 of the Act.

Paragraph (a) inserts a new subparagraph (5) into paragraph 1. This new subparagraph provides that the supply of goods to a taxable person who is subsequently the deemed supplier of those goods is zero-rated.

Paragraph (b) inserts a new subparagraph (3) into paragraph 2. This new subparagraph provides that the importation of goods into the State is zero-rated where the Import Scheme is used to declare and pay the VAT due on the importation of the goods.

Regulation 30 amends Part 1 and Part 2 of Schedule 9 of the Act to reflect the change to the scope of the Union and non-Union schemes. In Part 1, references to sections 91A, 91B, 91C, 91D and 91E are deleted. In Part 2, references to sections 35A, 91A, 91D and 91E are inserted.

Footnotes