VAT

Question 1

what does VAT tax

Answer 1

goods and services where there is a consideration

Question 2

what conditions must apply for vat to be charged

Answer 2

• supply of goods and services
• effected in a state (place of supply is ireland)
• for consideration
• made by a taxable person
• acting in that capacity

Question 3

what does it mean that vat is charged at each stage of the supply chain

Answer 3

each supplier along the chain deducts vat charged to them and must charge VAT on their sales

ultimately the consumer must pay as they cannot deduct vat charged to them

Question 4

what does self supply mean

Answer 4

change of goods for vat purposes

Question 5

examples of self supply

Answer 5

move of computer from vat eligible to vat exempt part of the business

appropriation of business stock for private use

Question 6

what is the general rule for place of supply

Answer 6

where the goods are situated when the supply takes place

Question 7

if goods are being exported or imported where is the place of supply

Answer 7

where transportation begins

Question 8

if goods require assembly/instillation where is the place of supply

Answer 8

where assembly/instillation occurs

Question 9

if supply is b2b where is the place of supply

Answer 9

where the customer business has its establishment

Question 10

if supply is b2c where is the place of supply

Answer 10

where the supplier has its establishment

Question 11

what is the standard vat rate

Answer 11

23%

Question 12

what is the rate used for labour intensive items eg building services

or magazines, cinema, hairdresser, hotel

Answer 12

13.5%

Question 13

what is the rate used for newspapers, books

Answer 13

9%

Question 14

what is the rate used for sales of cattle and various other livestock and related supplies (farmers vat)

Answer 14

4.8%

Question 15

example of some 0 rated goods/services

Answer 15

medicines, childrens clothing

goods exported outside EU, goods dispatched to VAT registered customers in EU

Good purchased by travellers for destinations outside the EU

Question 16

examples of vat exempt goods and services

Answer 16

banking and financial, medical and dental, education, letting of property

Question 17

what does VAT exempt mean

Answer 17

cannot register for vat so cannot claim back on inputs or charge on outputs

Question 18

what is the difference between exempt and zero rated

Answer 18

zero rated can claim back on inputs

Question 19

what is the composite supply rule

Answer 19

a good/service contains two or more goods/service together

charge rate of the main item

Question 20

example of composite supply

Answer 20

coal and the bag it comes in

charge rate on coal

Question 21

what is multiple supply

Answer 21

goods/service sold as a unit but could easily be sold separately

apply individual rates to each component

Question 22

example of multiple supply

Answer 22

school book and copy book

Question 23

what is the two third rules

Answer 23

where a service requires a supply of goods

if service makes up 2/3 of the invoice use service rate (13.5%)

else use standard rate

Question 24

what is a taxable person

Answer 24

a person who independently carries out any business supplying goods or services which are liable to VAT or VAT exempt

Question 25

what is an accountable person

Answer 25

someone who is obliged to or elects to register for VAT

Question 26

who is obliged to register for VAT (what are the thresholds)

Answer 26

turnover exceeds

€75000 for goods
€37500 for services/goods and services

Question 27

why would someone want to elect to register for VAT

Answer 27

• to get money back on inputs
• if the price of what you are charging is at the lower rate this can be handy as you will receive more than you pay

Question 28

why would a business not want to elect to register

Answer 28

tedious process

more accountant work needed

may not make sense with their customer base if prices need to go up

Question 29

what is a reverse charge

Answer 29

moving some of the input VAT to the outputs

Question 30

what is the VAT rate for goods exported to non EU countries and why

Answer 30

0%

so that irish good remain competitive in an international context

Question 31

if goods are advertised on the internet but physically supplied cross boarder, where is the place of supply

Answer 31

country to which the goods are dispatched

so local VAT is applied

Question 32

when must VAT invoices be issued

Answer 32

by the 15th day of the month immediately following receipt or part payment

Question 33

what details must VAT invoices contain

Answer 33

name, address and VAT number of person making supply

name, address of person receiving supply

a sequential number

date of issue and date of supply

description of goods and services

unit price excl VAT

consideration payable

VAT applied

any reverse charges/self supplied

Question 34

what is the VAT rate for motor cars as input

Answer 34

23% * 20%

Question 35

what motor cars are elegible for the 20%

Answer 35

registered on or after 1 Jan 2009

CO2 group A or B

used 60% or more for business use

used for business purposes for at least 2 years (Clawback otherwise)

Question 36

who is eligible to pay vat on a cash receipts basis

Answer 36

business who more than 90% of turnover derives from supplies to public/persons not registered for VAT

where total turnover <€2m in year

Question 37

when is VAT paid

Answer 37

no later than the 19th day of the month immediately following the taxable period

Question 38

what is a taxable period for VAT

Answer 38

two calendar months
eg Jan + Feb, Mar + Apr …

Question 39

what are the returns for vat called

Answer 39

VAT3 Returns

Question 40

which day are VAT returns due

Answer 40

23rd day following the relevant period

eg due March 23rd for January+February period

Question 41

why might a business want to do VAT on a cash receipts basis

Answer 41

invoice basis could have a negative impact on cash flows

Question 42

how does cash receipts basis work

Answer 42

sales gets included in VAT period the money is received rather than when the invoice is made

purchases still look at invoices

Question 43

how does revenue check if you are calculating VAT correctly

Answer 43

turnover from SOPL broken down

calculates VAT at each rate for sales and purchases

compares to what was actually paid