Revenue Tax Briefing

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Revenue Tax Briefing Issue 01, April 2013

Finance Act 2013 - VAT Update

The purpose of this Tax Briefing is to outline the principal amendments to the Value-Added Tax Consolidation Act 2010 arising from Finance Act 2013. Detailed Notes for Guidance on Finance Act 2013 are available on the Revenue website.

Where appropriate, existing leaflets and guidance notes will be amended to reflect these amendments.

Threshold for Moneys Received Basis of Accounting for VAT

The threshold for accounting for VAT on the moneys received basis is being increased from €1,000,000 to €1,250,000 with effect from 1 May 2013. This increase was announced as part of Budget 2013 on 5 December 2012.

Flat-Rate Addition for Farmers

The flat-rate addition for unregistered farmers was reduced to 4.8% with effect from 1 January 2013. This change was announced as part of Budget 2013 on 5 December 2012.

Public Authorities

From 1 January 2013 the services threshold for VAT registration, currently €37,500, applies to the turnover derived by public bodies from the provision by them of facilities for sporting and physical education activities. This means that such bodies will not be obliged to register for VAT in respect of facilities for sporting and physical education activities unless they exceed this threshold, but they can elect to become taxable if they so choose.

Receivers & Liquidators

The Finance Act makes a number of provisions relating to receivers and liquidators.

For the avoidance of doubt, new provisions have been introduced to clarify that a receiver, liquidator or other person exercising a power, who, in the course of carrying on or winding up a business, supplies taxable services (e.g. operates a hotel or makes a taxable letting), is liable for VAT on those services/rents. Specific provisions, similar to those that apply to disposals of goods, have been introduced with regard to the obligations of the receiver/liquidator in relation to the VAT on such services/rents. The receiver/liquidator is obliged to register, make the return and remit the tax due in relation to the supply of the services/lettings.

The new provisions also specify that a receiver, liquidator (or other person exercising a power) is also obliged to make returns and remit any tax due as a result of any deductibility adjustment required:

  1. under the capital goods scheme (see below for new measures relating to receivers), or
  2. under the transitional rules for property (where there is an exempt letting of a transitional property on which the owner had claimed deductibility in relation to the development or acquisition).

Capital Goods Scheme

The Finance Act makes the following provisions in relation to the capital goods scheme.

Where a receiver is appointed or a mortgagee takes possession of a capital good, the obligations of the capital good owner are transferred to the receiver or mortgagee for the duration of the receivership or possession. Such obligations, which include maintaining the capital good record, calculating any adjustment in deductibility as a result of a change of use of the capital good and remitting any tax due as result of that adjustment, will also apply to any subsequent receiver appointed or mortgagee who takes possession.

Where the capital goods scheme adjustment results in an increase in deductibility the benefit of that increase will go to the receiver or mortgagee. There is also provision for apportionment of the liability or the increase in deductibility where the receivership or possession commences or ends during a capital goods scheme interval. Where the capital good reverts to the owner after the receivership or period of possession, the obligations under the capital goods scheme also revert to the owner.


The Finance Act provides that when an immovable good is sold by a receiver or liquidator, where a joint option to tax the sale is exercised, thereby making the purchaser accountable for VAT on the supply of immovable goods on a reverse charge basis, the purchaser is entitled to deduct the VAT incurred (subject to the normal deductibility rules).

Vouchers, etc.

The Finance Act provides that the existing special rule for vouchers being supplied to businesses for re-sale is now confined to supplies of vouchers to businesses that are established in the State. This means that a voucher with a redeemable value, which is sold to a business outside the State for onward supply, is not taxable on sale but rather the tax arises at the point of redemption of the voucher, resulting in tax being accounted for when redemption of the voucher takes place.