The Gazette 1982

APRIL 1982

GAZETTE

to be treated as bringing the matter within the scope of V.A.T.

Value Added Tax Regulations, 1979. Of these, perhaps, the most important in the property context are Sections 2, 3, 4, 10, 11 and 17 of the 1972 Act (most of which said Sections have been subjected to some form of amendment, extension or substitution by the other enactments mentioned) and Regulations 4 and 19. The Revenue Commissioners have themselves published (latest edition - July, 1980) a most useful explanatory booklet - ."V.A.T. on Property Transactions" - which is almost essential reading. Additionally, it must be said that the Senior Inspec- tors of Taxes are aware of the fact that many difficulties are posed by the application of the legislation to proper- ty. My own personal experience, which appears to be far from exclusive, is that they are not only understanding and helpful, but also prepared to discuss problems in the abstract. Postscript The foregoing is neither a summary nor a guide. It is certainly not an academic treatise. Its objective is merely to pinpoint certain salient features of a practical nature. There are numerous areas in this particular field of ac- tivity where consultation with "the experts" will un- doubtedly be appropriate. I can only hope that this arti- cle will be of some assistance to the profession generally. •

Building Contracts I am advised that the Revenue Commissioners take the view that in V.A.T. terms, it is inappropriate to in- voice for moneys periodically payable on foot of a Building Contract, until the project thereunder has been finalised (until, as contended, the supply of the service has been completed). By way of concession, it is ap- parently allowed, in the intervening period, that such in- voices will be admitted in support of claims for input credits, provided that they have, in effect, first been converted into receipts. Emphasis The above may seem to evidence a vast number of complications. There are indeed peculiarities in the application of V.A.T. to property, but these are largely attributable to the particular nature of the latter, and the manner in which the scheme has had to be attuned to adapt to its many and varied facets. Broadly speaking, the system, as thus tempered, is workable. A genuine endeavour should be made to operate same correctly, and to limit, so far as may be possible, the cash-flow pressures, which can result from its administration. I would, however, like to highlight the following pro- blematical aspects, which tend to present fundamental difficulties warranting research in individual cases: -

DON'T LEAVE YOUR MONEY IDLE AND MOTH-EATEN!

1.

"Self-supplies".

2.

Leases for terms of not less than ten years to unregistered parties. Cases where items (not clearly determinable as be- ing part of the "immovable goods") are supplied under Leases reserving inclusive rents.

3.

4.

Arrangements involving the management of pro- perty and reimbursement for services.

In the natural order of things, a disponer will wish to recover V.A.T. from his disponee. This (as appropriate) will be done on an invoicing basis, but questions fre- quently arise between the parties as to the shoulders on which the liability for V.A.T. in respect of any par- ticular transaction should lie. Almost apart from such procedures as have been established in the wake of the legislation, this can be a very contentious area, which can best be handled by prior agreement between the par- ties.

Deposit interest °/ o rates available up to l O ^ ° DEPENDING ON THE AMOUNT ON DEPOSIT with security,ease of withdrawal&I rusteeJStatus. i Send for free brochure ' NAME I I I ADDRESS I

References Most of the relevant provisions are to be found in the Value-Added Tax Act, 1972, Value-Added Tax (Amendment) Act, 1978, Finance (No. 2) Act, 1981 and

2 Lr.Merrion St reel, Dublin 2.Tel. (01) 763225

3 4