108C. Joint and several liability for tax

Summary

This section provides that where VAT has been fraudulently evaded, a person who knowingly or recklessly participates in transactions connected to that fraudulent evasion of VAT is jointly and severally liable for the VAT that has not been remitted and Revenue may notify them accordingly.

Details

This section applies to anyone who knowingly or recklessly participates, either as a purchaser or a supplier, in a chain of transactions that is connected to the fraudulent evasion of tax. That person may be held jointly and severally liable for the net amount of VAT due i.e. the amount of VAT that should have been paid in relation to a supply of goods or services or an intra-Community acquisition of goods. A person who is jointly and severally liable under this section will also be liable to pay interest on the outstanding amount of tax but will not be subject to penalties. It is possible that more than one accountable person may be notified that they are jointly and severally liable for the unpaid VAT where they are participants in a chain of transactions involving the same goods or services and where those transactions are linked to the fraudulent evasion of VAT.

(1) Subsection (1) provides for definitions.

(2) Subsection (2) provides that where at the time a supply or acquisition is made, a person knows or is reckless as to whether or not that supply or acquisition is connected with the fraudulent evasion of VAT which has not been paid to the Revenue Commissioners by the person who was originally liable, those persons are jointly and severally liable for that VAT.

(3) Subsection (3) provides the formula for the calculation of the VAT due.

(4) Subsection (4) provides for the notification of the person that he or she is jointly and severally liable for unpaid VAT, the amount for which he or she is liable and with whom he or she is jointly and severally liable.

Relevant Date: Finance Act 2020