Revenue Note for Guidance

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Revenue Note for Guidance

478A Stay and Spend Tax Credit

Summary

The section provides for a tax credit in respect of qualifying expenditure incurred on accommodation, food and drink, subject to certain conditions being met.

Qualifying expenditure includes expenditure on holiday accommodation, where the premises is registered with Fáilte Ireland, and food and drink (excluding alcohol), where it is served in premises such as or similar to a hotel, a restaurant, a café or licensed premises.

The services must be provided by a qualifying service provider. Service providers will qualify for participation in the scheme if they provide the services described above, are VAT registered, hold a current tax clearance certificate, and are registered for the scheme with the Revenue Commissioners.

The tax credit is equal to the lesser of 20 per cent of the expenditure incurred and €125 or, in the case of a jointly assessed couple, €250. Where the claimant does not have sufficient income tax liability to fully absorb the tax credit to which they are entitled, any excess may be set against the universal social charge payable by the claimant for that same year of assessment.

Details

Definitions

(1) “eligible service provider” means a person who—

  1. provides a qualifying service in the course of carrying on a business,
  2. has been issued with a tax clearance certificate in accordance with section 1095 and such tax clearance certificate has not been rescinded under subsection (3A) of that section, and
  3. is an accountable person under section 5 of the Value-Added Tax Consolidation Act 2010 and has been assigned a VAT registration number under section 65 of that Act;

“food and drink” means food with or without drink, but does not include drink without food;

“holiday accommodation” means accommodation at—

  1. premises that are registered in a register maintained and kept by the National Tourism Development Authority under Part III of the Tourist Traffic Act 1939, or
  2. premises that are listed in the list published or caused to be published by the National Tourism Development Authority under section 9 of the Tourist Traffic Act 1957;

“PPS Number”, in relation to an individual, means the individual’s Personal Public Service Number within the meaning of section 262 of the Social Welfare Consolidation Act 2005;

“qualifying expenditure” means expenditure on a qualifying service provided by a qualifying service provider but does not include expenditure incurred—

  1. on the provision of any alcoholic drink provided as part of the qualifying service, or
  2. on a particular instance of the provision of a qualifying service where the expenditure so incurred is less than €25;

“qualifying period” means the period beginning on 1 October 2020 and expiring on the day that is the later of—

  1. 30 April 2021, and
  2. where the Minister for Finance makes an order for the purposes of this paragraph, the day specified in the order;

“qualifying service” means—

  1. the provision of holiday accommodation, or
  2. the provision of food and drink, in a form suitable for human consumption without further preparation, in a hotel, restaurant, café, licensed premises (within the meaning of section 2 of the Public Health Alcohol Act 2018) or other similar establishment, where the food and drink so provided is consumed in the establishment in which it is provided;

“qualifying service provider” means an eligible service provider who has provided to the Revenue Commissioners (through such electronic means as the Revenue Commissioners make available) the information specified in subsection (2) and to whom a notice has been issued by the Revenue Commissioners in accordance with subsection (3)(a);

“tax reference number” means, in the case of an individual, the individual’s PPS Number and, in the case of a company, the reference number stated on any return of income form or notice of assessment issued to the company by the Revenue Commissioners;

“tax year” means a year of assessment for income tax purposes.

Qualifying service providers

(2)(a) – (e) Eligible service providers must provide certain information to the Revenue Commissioners in an electronic format in order to qualify for participation in the Stay and Spend scheme. The information to be provided to the Revenue Commissioners includes the service provider’s name (including any trading name if different), business address, tax reference number, VAT registration number and tax clearance access number.

(2)(f) Where the service provider provides holiday accommodation, they must provide to the Revenue Commissioners details of the type of accommodation provided and details of the service provider’s registration or listing with the National Tourism Development Authority.

(2)(g) Where the service provider provides food and drink, they must provide to the Revenue Commissioners details of the type of establishment in which the food and drink is provided.

(2)(h) Service providers must also make a declaration that they are an eligible service provider for the purposes of this scheme.

(3) Once the Revenue Commissioners have received the above information, they will review it and consider if they are satisfied that the information provided is complete and accurate.

(3)(a) Where the Revenue Commissioners are satisfied that the information provided is complete and accurate, they will issue a notice to the service provider specifying that they are a qualifying service provider for the purposes of this scheme.

(3)(b) Where the Revenue Commissioners are not satisfied that the information provided is complete and accurate, they will issue a notice to the service provider specifying that they are not a qualifying service provider for the purposes of this scheme. The Revenue Commissioners will specify in this notice the reasons why they are not satisfied that the information provided is complete and accurate.

(4) The trading name, business address and nature of the business of all qualifying service providers will be published on the website of the Revenue Commissioners.

Entitlement to the tax credit

(5) In a tax year, where an individual (known as the claimant) makes a claim and proves that he or she has incurred qualifying expenditure in the part of that tax year that falls within the qualifying period, he or she will be entitled to the stay and spend tax credit.

(5)(a)-(b) Where the claimant is a married person or civil partner and is assessed to tax under section 1017 or section 1031C respectively in that tax year, the qualifying expenditure may be incurred by the individual themselves or by his or her spouse or civil partner. In any other case the claim submitted must relate to qualifying expenditure incurred by the claimant themselves.

(5)(i) Where the claimant is a married person or civil partner and is assessed to tax under section 1017 or section 1031C respectively in that tax year, the claimant is entitled to a tax credit equal to the lesser of €250 and 20% the total qualifying expenditure incurred by the claimant themselves and his or her spouse or civil partner, in that tax year.

(5)(ii) In any other case the claimant is entitled to a tax credit equal to the lesser of €125 and 20% the total qualifying expenditure incurred by the claimant in that tax year.

(6)(a)(i) Where the claimant is entitled to the stay and spend tax credit in both the 2020 and 2021 tax years, the aggregate tax credit a claimant can receive under the scheme (in respect of both years) shall not exceed €250 where the claimant is a married person or civil partner assessed to tax in accordance with section 1017 or section 1031C in respect of both years.

(6)(a)(ii) In all other cases where the claimant is entitled to the stay and spend tax credit in both the 2020 and 2021 tax year, the aggregate tax credit a claimant can receive under the scheme (in respect of both years) shall not exceed €125.

(6)(b) Notwithstanding the above, where the claimant is entitled to the stay and spend tax credit in both the 2020 and 2021 tax years, the aggregate tax credit a claimant can receive under the scheme (in respect of both years) shall not exceed €250 where the claimant is a married person or civil partner assessed to tax in accordance with section 1017 or section 1031C in respect of one of the years only (i.e. they can’t claim €125 in the first year and €250 in the second year).

Application

(7) The tax credit to which a claimant is entitled under the scheme in either the 2020 or 2021 tax year shall be used to reduce the claimant’s liability to income tax in that tax year, after any other allowance, deduction or relief specified in the Table to section 458 has been given to the claimant.

Where the claimant’s liability to income tax in the relevant tax year, after any other allowance, deduction or relief specified in the Table to section 458 has been given, is less than the tax credit to which they are entitled under this section, the difference between the amount of the tax credit and the amount of income tax payable may be set against a charge to universal social charge which is due and payable by the claimant in that same tax year.

Making a claim

(8)(a) – (b) Claimants shall make a claim for this tax credit electronically and shall provide their name, address and PPS number to the Revenue Commissioners. Where the individual is a married person or civil partner who is jointly assessed to tax in accordance with section 1017 or 1031C respectively, they shall also provide the name, address and PPS number of their spouse or civil partner to the Revenue Commissioners.

(8)(c) Claimants shall also provide full details of the qualifying expenditure incurred, including the trading name and business address of the qualifying service provider and details of the qualifying service received. The claimant shall also provide a copy of the receipt issued by the qualifying service provider upon payment for the qualifying service.

Furnishing of information

(9) The Revenue Commissioners may require qualifying service providers to furnish them with such information as they consider necessary to determine that the requirements of this section have been met. Where the Revenue Commissioners require qualifying service providers to furnish them with such information they will issue a notice in writing and specify the timeframe within which the qualifying service provider must reply. This timeframe will not be less than 30 days.

Extension of qualifying period

(10)(a) The qualifying period commences on 1 October 2020 and ends on the later of 30 April 2021 or the day specified in an order made by the Minister for Finance. The Minister for Finance may make an order specifying an end date other than 30 April 2021 where it is deemed necessary in order to mitigate the adverse economic consequences resulting, or likely to result, from the spread of Covid-19.

(10)(b) Where any such order is made the end date specified therein will not be a day that falls after 31 December 2021.

(10)(c) Any such order made shall be laid before Dáil Éireann as soon as may be after it has been made. The order will only be annulled if a resolution annulling the it is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the order is laid before it.

Relevant Date: Finance Act 2021