14. The State and public bodies

Summary

This section deals with the VAT position of the State and public bodies. Since 1 July 2010, the State or public bodies – which are defined to cover local authorities, Government departments and statutory bodies – are taxable if they provide services outside their regulatory function or if they engage (on a more than negligible scale) in specific activities that are listed in Annex I of the VAT Directive or where there is likely to be a distortion of competition.

These rules, insofar as they relate to supplies of community facilities (defined as sports facilities (other than golf) and the hiring of community halls and suchlike to certain non-profit making bodies) are subject to commencement by order of the Minister for Finance.

Details

(1) For the purposes of the intra-Community acquisition rules (see section 9 and section 10), where a public body effects an ICA in the State, the acquisition is deemed to have been effected in the course or furtherance of business. This means that such bodies have to register and account for VAT where their intra-Community acquisitions exceed the €41,000 threshold in a 12-month period.

(2) Subsection (2) provides that (subject to subsection (3)) the State and public bodies are treated as taxable persons where they carry out activities or transactions outside of their regulatory functions, where there is a distortion of competition, or where the activities are listed in Schedule 6 and are carried out on a more than negligible scale. Schedule 6 reproduces Annex I of the VAT Directive which lists activities such as telecommunications services, passenger transport and gas/electricity supply. Bodies governed by public law are regarded as taxable under the VAT Directive when they engage (other than on a small scale) in activities on the list.

This subsection comes into operation on 1 January 2013 in so far as it applies to the supply of ‘community facilities’ within the meaning of subsection (3)(a)(i) i.e. the provision of facilities for taking part in sport or physical education other than golf.

(3)(a) Community facilities are defined as facilities for taking part in, or services closely related to the provision of, sporting or physical education activities (other than golf) and the hiring of community halls and suchlike to non-profit making sporting, cultural, social and community organisations.

(3)(b) The provisions of subsection (2), in so far as they relate to the supply by public bodies of community facilities, are subject to commencement by Ministerial Order.¹

(3)(c) Paragraph (c) preserves the position that the State and local authorities are not accountable persons with respect to the supply by them of a community facility until a commencement order under paragraph (b) is made.

Relevant Date: Finance Act 2020