52. General rule on exempted activity

Summary

This section provides that tax will not be chargeable in respect of exempted activities. Exempt activities are listed in Schedule 1. This section gives the Minister for Finance power by order to amend Schedule 1 and to amend or revoke any such order. Apart from Schedule 1 activities and any activities which the Minister may declare by order to be exempt, the definition of exempted activities in section 2(1) also includes supplies of immovable goods which are not liable to tax in accordance with the relevant provisions in Part 11.

An “exempted activity” differs from an activity liable at the zero rate in that no tax is chargeable on the relevant consideration nor is any input credit or repayment allowed in respect of the tax borne on purchases of goods and services for the activity. Under zero-rating, the amount of VAT charged on the consideration is zero but full input credit is allowable for any tax borne on purchases of goods and services for the activity.

Details

(1) Subsection (1) provides that tax will not be chargeable in respect of any exempted activity. An “exempted activity” is defined in section 2(1).

(2) Subsection (2) –

• authorises the Minister to make an order amending Schedule 1 (paragraph (a)),
• provides that any such order may be amended or revoked by the Minister (paragraph (b)), and
• makes the usual provisions in regard to laying an order before Dáil Éireann (paragraph (c)).

Relevant Date: Finance Act 2020