Entitlement to VAT deduction - rule change

VAT-Accountants_Done

In computing the amount of VAT payable in respect of a taxable period, an accountable person may deduct the VAT charged on most goods and services which are used for the purposes of his or her taxable business; however, no deduction may be made for the VAT on goods and services used for any other purpose, such as VAT exempt activities.

To be entitled to the deduction the trader must have a proper VAT invoice or relevant Customs receipt as appropriate. 

With effect from the 1 January 2014, where a person deducts VAT in a taxable period but has not paid the supplier for the goods or services within 6 months of the end of that taxable period, then the amount of VAT deductible will be reduced by the amount of VAT relating to the unpaid consideration i.e. the VAT deducted relating to the unpaid consideration must be repaid to Revenue. 

A re-adjustment is provided for in the event of subsequent payment or part payment for the goods or services.

If you require further guidance about VAT, please contact a member of our professional Team on the following number: +353 74 912 2820 or email us at: mail@edwinfoley.com.

 

 Disclaimer information:

The information contained in this update may be subject to change and accordingly is not a substitute for professional advice or services, nor should it be used as a basis for any decision or action that may affect your finances or your business. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional advisor. This firm shall not be responsible for any loss whatsoever sustained by any person who relies on this update