VAT Consequences For I.T. Companies In Ireland – Part II

When we talk about “electronically supplied services” we mean:

• Website supply, web hosting, distance programme and equipment maintenance.

• Software supply and upgrades.

• Supply of distance teaching.

• Supply of film, games and music.

• Supply of artistic, cultural, political, scientific and sporting as well as entertainment broadcasts and events.

• Supply of images, text and information and making databases available.

There is a more detailed definition of “electronically supplied services” in Article 7 of Council Implementing Regulation of 15th March 2011 (282/2011/EU).

If a United States software company supplies software upgrades to private clients in twenty eight E.U. member states, does that company have to register in every one of those states?

The “Special Scheme” is optional and enables a non E.U. supplier making supplies of electronically supplied services to private, non-taxable individuals within the E.U. choose one E.U. state in which to register and pay VAT in respect of the supplies it makes within and throughout the E.U.

For example, a U.S. business/company supplies web hosting services to private consumers in Ireland, the UK and Germany. The U.S. business can opt to register for the “Special Scheme” in Ireland which means:

• it charges Irish VAT to its Irish customers.

• it charges UK VAT to its UK customers and

• it charges German VAT to its German customers

• it registers in Ireland using ROS (Revenue Online System).

• it prepares and files a single quarterly VAT Return and pays all the relevant VAT to the Irish VAT authorities.

• The Irish VAT Revenue then distributes the UK VAT to the UK Revenue Authorities and the German VAT to the German Tax Authorities.

The U.S. I.T. business/company is eligible to use this scheme if it is not established in the E.U. and if it is not registered or required to be registered for VAT in any other E.U. member state.

In accordance with Circular 230 Disclosure

Since founding Accounts Advice Centre in Dublin in 1996, Claire McNamara has established a reputation for successfully advising businesses, corporate and personal tax clients. Her knowledge spans various sectors and her experience includes corporate transactions, inheritance tax planning, International Tax Treaties, personal tax as well as advising on issues affecting non domiciled individuals and offshore clients. She constantly delivers a value added service and efficient tax management solutions to high net worth private clients, property owners, executives, entrepreneurs, entertainers and members of various professions.

As a Chartered Tax Adviser, Claire has considerable experience in professional practice and will personally help you to deal with all your tax affairs competently, professionally and successfully. She has also lectured extensively in taxation on courses for the main professional accountancy qualifications including A.C.C.A., A.C.A. and C.P.A. and is actively involved in preparing students for the Irish Tax Institute’s CTA qualification.

Claire has effectively handled a number of Revenue Audits and Appeals on behalf of her diverse client base and has successfully negotiated solutions resulting in substantial differences to the eventual tax liability, surcharge and penalties.


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