Chapter 5 – Expressions of doubt

81. Letter of expression of doubt

Summary

This section allows a person who is in doubt about the application of VAT law to a transaction to lodge a letter of expression of doubt with Revenue. If the expression of doubt is accepted by Revenue as genuine, interest will not apply to any tax payable on the resolution of the matter in doubt.

Details

(1) Subsection (1) sets out the provisions for the purposes of the section:

• Where a non-registered person is in doubt as to whether he or she is an accountable person, that person can avail of the expression of doubt mechanism.
• A letter of expression of doubt must be clearly identified as such and must:
• set out full details of the circumstances of the transaction,
• make reference to the provisions of the law giving rise to the doubt,
• identify the amount of tax or deductibility in doubt in respect of the taxable period to which the expression of doubt relates, and
• be accompanied by any relevant supporting documentation.

(2)(a) An accountable person who is in doubt about the application of VAT to a transaction may lodge the expression of doubt with his or her local Revenue District at the same time as the return is due.

(2)(b) The section only applies if the return is furnished on time to the Collector-General.

(3) An expression of doubt must be lodged by a person who is concerned as to whether or not he or she is an accountable person not later than the 19th of the month following the taxable period in which the transaction giving rise to the doubt occurred.

(4) In the case of a genuine expression of doubt being accepted by Revenue, interest will not be payable in respect of any additional liability arising as a result of Revenue’s examination of the matter in doubt, if payment of the additional amount is made on time, as if it were tax due for the taxable period in which the notification is issued by Revenue of its determination of the matter in doubt.

(5) Subsection (5) provides the circumstances in which Revenue will not accept an expression of doubt as genuine. In particular, these are where Revenue:

• has issued general guidelines about the application of the law in similar circumstances,
• is of the opinion that the matter is otherwise sufficiently free from doubt as not to warrant an expression of doubt, or
• is of the opinion that the accountable person was acting with a view to the evasion or avoidance of tax.

(6) Revenue will notify the accountable person if an expression of doubt is not accepted as genuine. The case is then treated as if no expression of doubt has been lodged and interest charges apply in the normal way.

(7) Subsection (7) allows for an appeal mechanism where an accountable person is aggrieved by a decision of Revenue that the expression of doubt is not genuine. The appeal may be lodged in accordance with section 949I of the Taxes Consolidation Act 1997 within the period of 30 days after the date of notice of that decision.

(8) An expression of doubt is deemed not to be made unless it is acknowledged by Revenue and that acknowledgement is kept as part of the accountable person’s records.

Relevant Date: Finance Act 2020