Value-Added Tax: Veterinary Services

Background

The provisions of the EU Second Simplification Directive (Council Directive 95/7/EC of 10 April 1995) were incorporated into Irish VAT law initially by the European Communities (Value Added Tax) Regulations 1995 (S.I. 363 of 1995) and subsequently by Sections 87-90 Finance Act 1996. Those provisions dealing with contract work on movable goods were also treated as applying to services provided in the State by Irish established veterinary surgeons on animals (mainly racehorses) whose owners were established and VAT registered in another Member State. The net effect of this treatment was that no Irish VAT was charged on the services and the customer was liable under a reverse charge mechanism in the other Member State.

Review

The European Court of Justice in the case of Maatschap MJM Linthorst, KGP Pouwels and J Scheres cs v Inspecteur der Belastingdienst/Ondernemingen Roermond (Case C-167/95) examined which sub-section of Article 9 of the Sixth Directive (77/388/EEC) applied to the services of veterinary surgeons.

It considered Article 9(2)(c) [Section 5 (6) (c) (iv) VAT Act 1972] which deals with valuations of movable tangible property and work on movable tangible property and Article 9(2)(e) which covers services contained in the Fourth Schedule of the VAT Act.

It concluded that the principal work of veterinary surgeons was the provision of therapeutic treatment administered in accordance with scientific rules and that it did not come within the sub-sections stated above.

Consequently the place of supply of the services of veterinary surgeons is deemed to be supplied where the supplier has established his business or has a fixed establishment from which the service is supplied in accordance with Article 9(1) [Section 5 (5) VAT Act 1972].

Revised Practice

As a consequence of the decision that the service is not work on movable tangible property, the services of veterinary surgeons cannot be regarded as qualifying for treatment as contract work under the EU Second Simplification Directive and Irish VAT must be charged on such services.

The revised practice applies from1 September 1997. Foreign VAT registered owners will however be able to apply for refunds under the 8th Directive (79/1072/EEC) from:

Office of the Accountant General,
Kilrush Road,
Ennis,
Co. Clare.

Telephone: (065) 41200

Extns. 2407 / 2409

Dublin callers (01) 677 4211

Fax: (065) 40394