319 Adjustment of allowances by reference to value-added tax

Summary

This section secures that where the cost of any machinery or plant or any other capital expenditure is being taken into account for the purposes of capital allowances, the cost or expenditure to be taken into account is to be reduced by value-added tax deductions or repayments which may be claimed in respect of that cost or expenditure under Chapter 1 of Part 8 of the Value-Added Tax Consolidation Act 2010, or under an order made by the Minister for Finance under section 103 of that Act. Similarly, in computing a balancing allowance or charge, no account is to be taken of value-added tax chargeable on the amount of the sale, insurance, salvage or compensation moneys received.

Details

(1) The cost to a person of any machinery and plant, or the amount of any other expenditure incurred by a person, to be taken into account for the purposes of certain deductions, allowances and reliefs is to be reduced by any value-added tax included in that cost or expenditure for which the person may claim a deduction under Chapter 1 of Part 8 of the Value-Added Tax Consolidation Act 2010 or a refund under any order made by the Minister for Finance under section 103 of that Act. The deductions, allowances and reliefs to which this rule applies are those given under —

• Part 9 (which provides capital allowances for capital expenditure on industrial buildings or structures, machinery or plant, and dredging),
• sections 658 and 659 (which provide capital allowances for capital expenditure on farm buildings and other works),
• Chapter 1 of Part 24 (which provides capital allowances for capital expenditure on certain mining), and
• sections 764, 765 and 769 (which provide allowances for expenditure on scientific research and training of local staff).

(2) In calculating a balancing allowance or charge under Part 9 (industrial buildings or structures, machinery or plant, and dredging), the amount of the sale, insurance, salvage or compensation moneys to be taken into account is not to include the amount of any value-added tax chargeable on the person in respect of those moneys.

Relevant Date: Finance Act 2021