9. Intra-Community acquisitions and accountable persons

Summary

This section sets out the main rules under which persons making intra-Community acquisitions (ICAs) of goods are accountable for VAT. The general provision is that a threshold of €41,000 applies for persons making ICAs of goods in the course of their business, above which persons are accountable and liable to pay tax. Persons making ICAs below the threshold may opt to register for VAT if they so wish. However, there is no threshold in respect of goods that are subject to excise duty or in respect of ICAs of new means of transport.

It may be noted that exempt persons and non-taxable entities that elect to register in respect of ICAs do not get VAT deduction rights as a result.

Farmers, fishermen and racehorse trainers who are accountable in respect of intra-Community acquisitions, because their turnover in any continuous period of 12 months from ICAs exceeds the €41,000 threshold, are obliged to register for VAT but may “ring fence” the registration to the ICAs (and any received services from abroad).

The general rules on intra-Community acquisitions and the €41K threshold are subject to other rules on accountable persons and registration. For example, a person who is accountable because his or her taxable supplies in the State exceed the registration threshold for goods, or by virtue of the receipt of services from abroad that are deemed to be supplied in the State, is obliged to register for VAT in any event.

Details

(1) A person who engages in the intra-Community acquisition of goods “in the course or furtherance of business” is an accountable person and liable to pay the tax.

(2) There is an intra-Community acquisitions (ICAs) annual threshold of €41,000. A person is not an accountable person (unless he/she elects to be so) if his/her intra-Community acquisitions do not exceed this amount. The threshold provision does not apply to ICAs of new means of transport or to goods subject to excise duty. It may be noted that persons accountable only in respect of ICAs (for example, an exempt business) must register and account for the VAT but are not entitled to deduct it. The subsection does not apply if the person is accountable in respect of supplies of other goods and services.

(3) The threshold rule for intra-Community acquisitions does not apply to persons who are accountable in the normal way under section 5(1), unless they are persons covered by the election rules in section 6(1). For example, a person making taxable supplies in the State who engages in intra-Community acquisitions below the annual ICA threshold amount must register for VAT unless his/her supplies are below the registration threshold.

(4), (5) A farmer or fisherman who is an accountable person – either because he/she makes intra-Community acquisitions of goods over the €41,000 threshold, or because he/she receives supplies of goods from non-established suppliers under section 10 – is deemed to be accountable only in respect of

(a) intra-Community acquisitions made by him/her, and

(b) services received by him/her under reverse charge rules where the supplier is established outside the State, and services provided in his/her capacity as a premises provider under section 17(1).

This “ring fence” provision means, for example, that a flat-rate farmer can retain his/her flat-rate status. The farmer or fisherman may, however, elect that this provision does not apply to him/her.

(6) Subsection (6) covers the same concept as subsection (4) above, in respect of farmers providing racehorse training services (see section 17(2)). A racehorse trainer who is an accountable person – either because he/she makes intra-Community acquisitions of goods over the €41,000 threshold, or because he/she receives supplies of goods from non-established suppliers under section 10 – is deemed to be accountable only in respect of

(a) intra-Community acquisitions made by him/her,

(b) racehorse training services he/she supplies, and

(c) services received by him/her under reverse charge rules where the supplier is established outside the State, and services provided in his/her capacity as a premises provider under section 17(1).

(7) The racehorse trainer may elect that this provision does not apply to him/her. In other words, instead of being accountable only in respect of supplies listed under paragraphs (a) to (c) in subsection (6), he or she can elect to register in respect of all supplies.

Relevant Date: Finance Act 2020