The new reduced VAT rate of 9% for certain goods and services came into effect on 1st July and will remain in force until 31st December 2013.  The reduction in the VAT rate mainly impacts on tourism and leisure related activities.

Goods and Services at the 9% rate:

  • the supply of food and drink (excluding alcohol  and soft drinks) in the course of catering or by means of a vending machine
  • hot take-away food and hot drinks
  • hotel lettings, including guesthouses, caravan parks, camping sites etc
  • admissions to cinemas, theatres, certain musical performances, museums, art gallery exhibitions
  • amusement services of the kind normally supplied in fairgrounds or amusement park services
  • the provision of facilities for taking part in sporting activities by a person other than a non-profit making organisation
  • printed matter e.g. newspapers, brochures, leaflets, programmes, maps, catalogues, printed music (excluding books)
  • hairdressing services (beauty treatments remain liable at the 13.5% rate).


Invoices

In general, goods and services supplied before 1 July 2011 are liable to VAT at the rate in force at the time of supply, namely 13.5%. However, where goods and services are supplied in June 2011, by a trader who is obliged to issue a VAT invoice, and that trader issues the invoice after 30 June 2011, the rate in force in July applies, namely 9%.

A trader supplying goods and services to private individuals should always apply the VAT rate in force at the time of supply.

Credit Notes

Any VAT credit note or debit note relating to a supply of goods or services, which contains a VAT adjustment, should show VAT at the rate in force at the time the original invoice was issued.

Implementation

Traders should review the goods and services supplied to identify those that will qualify at the new 9% rate and ensure that their cash registers and IT systems are updated to apply the new rate from 1st July.

If you have any queries regarding the new VAT rate please contact.

Revenue in a recent e-brief determined that VAT on certain expenditure by flat rate farmers may qualify for VAT refunds subject to certain conditions being satisfied. This determination relates to expenditure incurred on underpasses, hedgerows and land reclamation.

Underpasses

Concrete underpasses that have been designed specifically to accommodate the transfer of livestock from one plot of land to another, where a public road separates the land, come within the terms of the refund order.

Hedgerows

The reference to ‘fencing’ includes hedgerows where they are planted by a farmer with the ultimate aim (on maturity) of stock proofing.  However, the order does not cover hedgerows grown for other purposes e.g. ornamental or shelter of dwelling.

Land Reclamation

Expenditure allowable under this heading may include ploughing and re-seeding where they are an integral part of the land reclamation and are actually carried out as part of a land reclamation project.

 

Useful links
The Revenue Commissioners – www.revenue.ie
The Department of Finance – www.finance.gov.ie
The Irish Taxation Institute – www.taxireland.com
O’Kelly Sutton Accountants Kildare – www.okellysuttoncrosby.com/sutton/