Revenue Note for Guidance

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Revenue Note for Guidance

6. Persons not accountable persons unless they so elect

Summary

This section provides that some categories of persons – farmers, fishermen and persons supplying goods and services below the registration thresholds – are not accountable persons unless they elect to be so, and then only during the period that the election has effect. Such persons do not have to register for VAT.

Details

(1) The provision is subject to rules about intra-Community acquisitions of goods (Chapter 3 of this Part) and services received from abroad (Chapter 4 of this Part); it is also subject to the provisions in relation to premises providers. (See notes on section 17(1))

  • (1)(a) Farmers are not accountable, unless they so elect, if they fall into the following categories:
    • (1)(a)(i) Annual turnover from the supply of agricultural services (other than insemination services, stock minding or stock rearing) does not exceed the services threshold;
    • (1)(a)(ii) Annual turnover from the supply of bovine semen does not exceed the goods threshold (certain sales are excluded in calculating the figure – see notes on subsection (2)(a) below);
    • (1)(a)(iii) Annual turnover from the supply of horticultural-type products (e.g. nursery stock) as specified in Schedule 3 to private individuals does not exceed the goods threshold;
    • (1)(a)(iv) Annual turnover from a combination of supplies of agricultural services and bovine semen/retail horticultural stock (all as defined above) does not exceed the services threshold;
    • (1)(a)(v) Annual turnover from a combination of supplies of bovine semen and retail horticultural stock (as defined above) does not exceed the goods threshold.
  • (1)(b) Fishermen are not accountable, unless they so elect, if their supplies of taxable goods and services fall into the following categories:
    • (1)(b)(i) Fish, caught in the course of their sea-fishing business, supplied to accountable persons and traders not established in Ireland who qualify for VAT refunds under section 102.
    • (1)(b)(ii) Supplies of fish (as defined above) together with machinery, etc. that was used in their sea-fishing business or other goods/services below the relevant registration limits.
  • (1)(c) Persons whose annual turnover from supplies of goods (excluding mail order goods supplied into Ireland under the distance sales rules in section 30) and services does not exceed the goods threshold are not accountable unless they so elect. For the provision to apply, at least 90% of that turnover must be derived from the supply of taxable goods, other than goods liable at the reduced or standard VAT rate produced from zero-rated raw materials.
  • (1)(d) Persons not covered by paragraphs (a), (b) or (c) whose annual turnover from supplies of goods and services does not exceed the services threshold are not accountable unless they so elect. (For example, the registration threshold is €37,500 for persons supplying goods liable at 13.5% or 23% that are made from zero-rated materials.)

Subsections (2) and (3) qualify the provisions in subsection (1), as follows:

(2)(a) In calculating the turnover figure for bovine semen supplies, sales between farmers that are licensed as Artificial Insemination (A.I.) stations and sales by farmers to a VAT-registered subsidiary are excluded.

(2)(b) Connected persons do not gain any advantage from splitting their business activities into business units which can trade below the goods/services thresholds in order to avoid registration, as the total consideration is taken into account.

(2)(c) Consideration is aggregated in the same way in relation to farmers supplying agricultural services or horticultural goods or livestock semen.

(2)(d) The registration threshold rules do not apply in respect of services received from abroad under the reverse charge rules. These recipients must register for VAT in the State, regardless of the value of the supplies.

(3) The provisions in relation to fishermen and the goods and services threshold rules in subsection (1) do not apply where the person making supplies in the State is established outside the State.

Relevant Date: Finance Act 2020