Value-Added Tax - Section 56 Zero-Rating of Goods and Services – Interpretation of total turnover for the purposes of determining if an applicant’s qualifying turnover exceeds 75% of total turnover

A qualifying person, under Section 56 of the Value-Added Tax Consolidation Act 2010, is an accountable person whose turnover from zero-rated intra-Community supplies of goods, exports and supplies of certain contract work exceeds, or is likely to exceed, 75% of his or her total annual turnover. Total annual turnover comprises turnover from the supply of all goods and services, including exempt supplies. However, the turnover from sales which involve the subsequent lease-back of the goods sold is excluded from annual turnover for the purposes of determining whether an accountable person qualifies under Section 56.

In line with its previous exclusion of fourth schedule services supplied from total turnover for the purpose of the 75% calculation, Revenue will allow the exclusion of the services listed in Section 33(5) Value-Added Tax Consolidation Act 2010 for this purpose. Sales by the applicant from locations outside the state to locations outside the state will be excluded also.

Revenue information leaflet, Section 56 Zero-Rating of Goods and Services, has recently been updated to include this clarification.