Revenue Precedents

Retail shop sells stock to Factor with right to buy back after period of two months. Can this be considered to come within the provisions of Section 3 (5) (b) (i) of the VAT Act (Section 20 VATCA 10) "transfer of ownership of goods as security for a loan or debt". It was agreed by Revenue that the transaction in this case came within the terms of Section 3 (5) (b) (i) on the understanding that if the Factor disposed of the goods to any person other than the supplier of the stock that it would be required to account for VAT on such supply. A/58

In the context of a multi-national group of companies all of which were owned directly or indirectly by a parent company, a transfer of a business took place between three companies at the same time, the intermediary one of which was not registered in the State. In the circumstances of this case, Revenue accepted that the fact that the intermediary company was not VAT-registered in this State, did not preclude the application of a VAT free transfer under Section 3(5)(b)(iii) (Section 20(2)(c) Value-Added Tax Consolidation Act 2010). A/402(a)

Disposal of a hotel to a partnership of 85 investors on whose behalf a holding company was set up as agent. A separate company was to run the hotel. In the circumstances of this case, Revenue accepted that Section 3(5)(b)(iii) (Section 20(2)(c) Value-Added Tax Consolidation Act 2010) was applied to the disposal. This acceptance was subject to confirmation that the company running the hotel would take responsibility for VAT on behalf of the various investors involved. A/402

A bakery transferred its trade to a wholly owned subsidiary and allowed the subsidiary to use the bakery premises and equipment without a lease. The parent company later sold the freehold interest in the premises, together with the equipment to the subsidiary, who in turn sold them to a third party who went on to carry on the bakery trade. In the circumstances of this case, while technically the initial surrender of possession would have given rise to a self-supply, given that all parties concerned were fully taxable, Revenue accepted that the provisions of Section 3(5)(b)(iii) (Section 20(2)(c) Value-Added Tax Consolidation Act 2010) could apply. A/74