Revenue Information Note

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Expression of Doubt

1. General

Section 19B of the Value-Added Tax Act, 1972, 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 VAT found to be due following Revenue’s examination of the application of VAT law to the transaction. This provision does not affect the taxpayer’s right to contact Revenue in the normal way for advice on the VAT treatment of any transaction. It is also important to note that the expression of doubt facility does not displace or override the normal obligations of an accountable persons in regard to the VAT code.

2. How is a letter of expression of doubt used?

A person who wishes to use this provision must submit a letter of expression of doubt (which can be in the form of electronic communication or letter) on time (see paragraph 5) to the Revenue District that normally deals with the tax affairs of the accountable person. The VAT return in respect of the period in which the transaction occurs must be lodged separately and on time with the Office of the Collector-General in the normal way.

The Revenue District will issue an acknowledgement of receipt of the letter of expression of doubt. If the expression of doubt is not accepted as genuine the person will be so advised in writing, within 14 days of its receipt, by the Revenue District. The taxpayer then should submit a supplementary VAT return to the Collector-General with any additional VAT liability due, for the period in which the transaction took place. As interest will be payable on any additional liability in these circumstances arrangements should be made to submit the supplementary return without delay. If the expression of doubt is accepted as genuine the Revenue District will make a ruling as soon as possible as to the correct VAT treatment of the transaction. Where additional VAT liability is identified it must be included in the VAT return for the period in which the ruling is given as if it were tax due for that period. No interest will apply in such circumstances to the VAT due on that transaction, provided that the return is submitted and VAT paid by the relevant due date.

3. Details to be included in the letter of expression of doubt

A letter of expression of doubt must be clearly identified as such and must:

  • set out full details of the circumstances of the transaction in doubt,
  • provide the basis on which doubt is being expressed,
  • identify the amount of tax or deductibility in doubt in respect of the taxable period to which the expression of doubt relates (see paragraph 7 in relation to recurring transactions),
  • make reference to the provisions of the law giving rise to the doubt,
  • be accompanied by any relevant supporting documentation, and
  • state whether relevant professional advice has been taken on the matter.

4. Time limit for submission of a letter of expression of doubt

A letter of expression of doubt must be submitted to the Revenue District responsible for a trader’s tax affairs at the time the VAT return for the period in which the transaction occurred is submitted to the Collector-General. An expression of doubt will not be accepted unless the VAT return is lodged by the due date (i.e. 19th of the month following the end of the taxable period – see also paragraph 11).

5. What must be included in the VAT return if an expression of doubt is being lodged?

The transaction giving rise to the doubt should be included or excluded in the VAT return on the basis of the treatment which the accountable person or agent feels is correct. For example, if an accountable person is lodging an expression of doubt about a rating issue but considers that a rate lower than the standard rate applies, then he/she may account for VAT on the return at the lower rate but lodge the expression of doubt with the Revenue District at the same time. If an accountable person has a doubt about whether a transaction is taxable at all, (or exempt from VAT), then this transaction may be excluded from the return but details should be included in the letter of expression of doubt. Again, if an accountable person considers that he/she is entitled to deductibility as regards any transaction then a VAT credit may be claimed in the return subject to a letter of expression of doubt being furnished.

6. What is the position regarding the issue of a VAT invoice?

Where an accountable person lodges an expression of doubt in relation to the tax treatment of a transaction in respect of which a VAT invoice must issue, the VAT details on the invoice must be consistent with the tax treatment that the taxpayer decides to adopt (see paragraph 5). In this regard it should be noted that the outcome of the expression of doubt could be that additional VAT is payable in respect of the transactions in question.

7. What is the position regarding recurring transactions?

Transactions which give rise to a letter of expression of doubt can be recurring. These recurring transactions can arise in two different situations. Firstly, where the same type of transaction recurs during a taxable period. Secondly, where the same type of transaction recurs during a taxable period subsequent to the taxable period in respect of which a letter of expression of doubt has been lodged. The second situation will only arise where Revenue has not yet given a ruling on the transaction in question.

In the first instance, it is necessary only to submit one example of the documentation on the type of transaction involved with the letter of expression of doubt. However, the full amount of the VAT in doubt in the total of all the recurring transactions during that period must be mentioned in the letter of expression of doubt.

In the second instance, where sample documentation has already been submitted with the first letter of expression of doubt and Revenue’s ruling is awaited, it is only necessary in the subsequent letters of expression of doubt to refer to the first letter of expression of doubt, but the amount of tax in doubt in each return must be identified in each subsequent letter.

8. Circumstances when a letter of an expression of doubt is not accepted as genuine

A letter of expression of doubt will not be accepted where -

  • Revenue has issued general guidelines such as the Guide to Value-Added Tax, Statements of Practice, Information Leaflets, Notes for Guidance, FOI Precedents Database or VAT Rates Database about the application of the law in similar circumstances.
  • Revenue is of the opinion that the matter is sufficiently free from doubt as not to warrant an expression of doubt, or
  • Revenue is of the opinion that the accountable person was acting with a view to the evasion or avoidance of tax.

Where Revenue does not accept that a letter of expression of doubt is genuine the accountable person will be informed in writing of the reason or reasons for the non-acceptance of the letter by Revenue.

9. Appeal

A person aggrieved by a decision of Revenue that a letter of expression of doubt is not genuine may appeal to the Appeal Commissioners by giving notice in writing to his/her Revenue District within twenty-one days from the date of the decision. Of course, where an accountable person is aggrieved by a Revenue ruling regarding the VAT treatment of the transaction which is the subject of the letter of expression of doubt, he/she can appeal this in the normal way.

10. Interest

Where Revenue accepts that a genuine expression of doubt has been lodged by an accountable person, interest charges will not apply to any additional liability arising from the matter in doubt provided the additional liability is included in the return for the taxable period in which Revenue’s ruling on the VAT treatment of the transaction in question is issued as if it were tax due for that period.

However, interest charges will arise in situations where Revenue does not accept an expression of doubt as genuine. Interest will apply from the day after the due date for submission of the return for the period in which the transaction occurred, not from the date of the Revenue decision.

Interest will also apply in situations where the Appeal Commissioners uphold a decision of Revenue that a particular letter of expression of doubt is not genuine. Interest in these situations will apply from the day after the due date for submission of the return for the period in which the transaction occurred. Where –

  • a genuine expression of doubt is lodged,
  • Revenue (or, where appropriate, the Appeal Commissioners) determine that VAT is due on a transaction or that VAT claimed by a taxpayer was not, in fact, deductible on a transaction, and
  • VAT is not paid (or accounted for) by the due date for the VAT return covering the taxable period in which the Revenue ruling is issued, interest will apply from the day after the due date for submission of the return for the period in which the Revenue ruling is issued.

11. Can a person not registered for VAT avail of this facility?

The legislation also provides that a person not registered for VAT who is in doubt as to whether he/she is an accountable person may avail of the expression of doubt mechanism. In these circumstances the person must lodge the letter of expression of doubt not later than the nineteenth day of the month following the taxable period in which the transaction giving rise to the doubt occurred.

12. Documents to be retained/records kept

The accountable person must keep the Revenue acknowledgement of his or her expression of doubt as part of his or her records. A letter of expression of doubt shall be deemed not to have been made unless its receipt is acknowledged by Revenue and that acknowledgement forms part of the records kept by the accountable person for the purposes of section 16 of the VAT Act. An accountable person should contact the local Revenue District in the event that an acknowledgement of the letter of expression of doubt is not received.

13. Further information

Enquiries regarding any issue contained in this Information Leaflet should be addressed to the Revenue District responsible for the taxpayer’s affairs. Contact details for all Revenue Districts can be found on the Contact Details Page

VAT Appeals & Communications Branch,
Indirect Taxes Division,
Stamping Building,
Dublin Castle.

October 2008