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Taxation (Ireland) > General > Flashcards

General Flashcards

1
Q

Desirable Characteristics of a Taxation System (Adam Smith)

A

Equity
Certainty
Convenience
Efficiency

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2
Q

Tax Neutrality

A

The ability of a tax to be applied without changing consumer behaviour

Or

The marginal amount of taxation added being compensated for by a reduction in income taxes

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3
Q

The Vat Directive

A

An EU council directive that secures community law uniformity

It overrides disagreeing national law (aka, it has primacy)

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4
Q

Derogation

A

Permission granted to deviate from a “shall” provision of The VAT Directive

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5
Q

VAT Consolidation Act (VATCA) purpose

A

Consolidated/replaced all previous VAT legislation for easy access and cross-referencing

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6
Q

In what way is VAT on imports different in the UK when compared with the EU?

A

VAT on imports is now deducted from periodic VAT inputs rather than paid upfront.

(This is unusual)

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7
Q

Conditions for VAT to apply

A

Must be a supply of goods or services
Supply made for sale within Ireland by a taxable person
Must be supplied in the course/furtherance of business

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8
Q

Input VAT

A

VAT incurred by a registered person when purchasing from another VAT-registered trader

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9
Q

Output VAT

A

VAT charged by a registered person when selling to an(y)other person

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10
Q

What happens when goods previously used for making taxable supplies are moved to an exempt use?

A

A self-supply of said goods is deemed to have been made

Likewise if goods are appropriated for private use

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11
Q

Examples of unusual supplies of services:

A

A vending machine: Supplying the service of providing food fit for immediate consumption

Operation of a canteen by a business: A self-supply of a service

Leasing/Hiring goods: Supplying the leasing service in addition to the actual good

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12
Q

Place of Supply of Services:

When Business-To-Business Supply

A

Where the customer has their establishment

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13
Q

Place of Supply of Services:

Where Business-To-Customer Supply

A

Where the supplier’s establishment is located

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14
Q

Place of Supply of Services:

When connected with Property

A

Where the property is located

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15
Q

Place of Supply of Services:

Goods or Passenger Transportation

A

Place(s) transport occurs

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16
Q

Place of Supply of Services:

Catering

A

Where supply takes place

If onboard an international transit: The place of departure

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17
Q

Rates of VAT in Ireland

A 
Zero: 0%
Livestock: 4.8%
Flat: 5.4%
Reduced: 9% or 13.5%
Standard: 23%
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18
Q

Examples of goods/services for which 0% VAT applies

A

Goods exported outside the EU

Goods bought by the VAT-registered within the EU

PPE for COVID

Import-Export Transportation services

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19
Q

Examples of good/services for which the 9% reduced rate of VAT applies

A

Newspapers

Ebooks

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20
Q

Examples of goods/services for which the 13.5% reduced VAT reate applies

A 
Heating fuel
The service of providing food and drink
Cinema tickets
Building work
Property
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21
Q

VAT Exempt Supplies (Definition and Examples)

A

NOT the same as zero-rate VAT, though result is.
Doesn’t require registration or as much record-keeping

Examples:
Most financial services
Insurance
An Post
Educational and Medical services
The lottery
22
Q

Principal Supply

A

The most predominant pert of a composite supply

23
Q

Ancillary Supply

A

Part of a composite supply that is not dissociable from the principal supply

24
Q

Composite Supplies

A

A supply comprising of two or more supplies of goods/services made in conjunction with one another.

Taxed at the VAT rate applicable to the principal

25
Q

Multiple Supply

A

Two or more individual supplies made side by side (under one price) e.g. a book and notebook combo deal

Where each item can be used seperately if so chosen

26
Q

Two-Thirds Rule

A

Where the cost (excl VAT) of a service supply is made up of >two-thirds the contract price, use the VAT rate applicable to the goods not the service.

27
Q

Who is obliged to register and account for VAT?

A

Traders supplying:
>€75,000 of goods
>€35,000 of services

Foreign traders supplying in Ireland

Construction contractors who subcontract work

28
Q

Is it possible to voluntarily register for VAT if under the turnover thresholds?

A

Yes, farmers and fishers often do.

Allows them to recover VAT from purchases but does increase the administrative burden

29
Q

Deeming Provisions

A

Circumstances under which VAT is charged when normally it wouldn’t be.

E.g. VAT is charged on hotels serving food as it is “deemed” a service not a good.

30
Q

Reverse Charge

A

When the obligation to charge VATapplies to the receiver of the service not the supplier.

E.g.
Subcontracted construction work: Principal contractor is accountable

Electricity or Gas supplied to a business: the business is accountable for VAT

31
Q

The Single Market

A

The economic market place consisting of the 28 EU member states

32
Q

Goods Exported to non-EU countries:
Place of Supply
Rate of VAT
Paperwork Requirement

A

Place of supply: Where the transportation begins (Ireland)

Rate of VAT: 0%
(Transportation within Ireland immediately prior to exportation is also taxed at 0%, e.g. from Athlone to Dublin Port)

Paperwork requirement: Evidence of export

33
Q

Goods Exported to Businesses within the EU:
Place of Supply
Rate of VAT
Paperwork requirement

A

Place of Supply: Ireland

Rate of VAT: 0% (as long as customer is VAT-registered)

Paperwork: Evidence of dispatch including customer VAT number

34
Q

Goods exported to EU-resident Individuals:
Place of Supply
Rate of VAT

A

Place of Supply: Ireland (usually, unless above a certain threshold)

Rate of VAT: Dependent on type of goods

35
Q

Goods Imported from non-EU countries:
Place of Supply
Application of VAT
Paperwork

A

Place of Supply: The point of importation (Ireland)

VAT: Applied to total cost (including customs, excise, insurance, etc.) at the rate applicable to such goods in Ireland
Transportation at zero-rate VAT

Paperwork: Accounted for on VAT returns when customer registered for VAT

36
Q

Goods Imported from EU:
Rate of VAT
Paperwork Requirement

A

Rate of VAT:
If the customer is registered for VAT, at Irish rate. If not, foreign rate.

Paperwork: An invoice with both the supplier and customer’s VAT numbers (where possible)

37
Q

Under what circumstances must a customer importing goods from within the EU register for VAT (even if their business type is usually not accountable for VAT)?

A

If they are importing >€41,000 of goods within 12 months

38
Q

Triangulation

A

A middleman is not obliged to register for VAT.

If there are a series of transactions all within the EU, the final customer accounts for supply on a reverse charge basis.

39
Q

Call-Off Stock

A

Goods imported on behalf of a final customer, but warehoused and not transferred to that customer until a later date.

(The final transfer of the goods to the customer is deemed NOT to be a supply for VAT purposes, since they’ve already bought the goods.)

40
Q

Services Received from Abroad:
Place of Supply
VAT requirements

A

Place of Supply:
If business-to-business, where the recipient is located.
If B2C, where the supplier is located.
If associated with land or buildings, where that property is located.

Business recipients MUST register for VAT (no threshold)

41
Q

Mini One Stop Shop (MOSS)

A

Optional scheme to account for VAT due on multi-country EU supplies via a web-portal in one member state.

(Was originally just for e-services but has applied to goods too since 2021)

42
Q

What paperwork requirement occurs if goods annually dispatched to EU states exceeds €635,000?

A

Monthly detailed “Intrastat” tax filings are needed in addition to the usual annual returns.

43
Q

Self-billing (definition)

A

When a customer issues an invoice on behalf of their supplier
- Often done by large businesses who have small suppliers

44
Q

What happens when an input good/service is used for both taxable and non-taxable supplies?

A

It is considered “dual-use” and a partial deduction of input VAT is given based on how much turnover of the business is on taxable vs non-taxable supplies for that year.

45
Q

VAT Due vs VAT Payable

A

Due = Total output VAT

whereas

Payable = VAT due - input VAT

46
Q

When must VAT payable be paid?

A

By the 19th of the month following the taxable period

47
Q

Taxable Period

A

Two months beginning on the 1st of Jan, Mar, May, Jul, Sept, and Nov

48
Q

What do Margin Schemes allow?

A

For VAT to be charged only on the margin (23%) applied by the vendor:

  • Only for use with second hand goods, artwork, collectibles, and precious metals.
  • All taxed at 23% regardless of goods type
49
Q

Do state and local authorities pay VAT?

A

Not unless their activities are of a commercial nature

50
Q

When must farmers register for VAT?

A

If supplying:

- Supplying agriculture services > €37,500
- Supplying biological assets worth >€75,000
51
Q

Flat-Rate VAT for Farming

A

5.4%

added to supplies from farmers to VAT-registered customers and kept by the unregistered farmer to compensate for VAT incurred on purchases

Taxation (Ireland) (3 decks)

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