Irish Revenue Embroiled IN VAT Row Over Canteen Subsidies
International professional
service provider Deloitte & Touche announced earlier this week that it intends
to take the Irish tax authorities before the European Union over a dispute which
centres on VAT on canteen subsidies. According to Deloitte &
Touche, under European law, the Revenue Commissioners are permitted to charge
VAT only on the actual price paid by the customer for canteen products. However,
the Revenue has been charging VAT on the 'actual cost of production', a method
which takes account of any subsidies provided by the employer to reduce the
price. If the consultancy firm
is successful in its challenge- which seems more than likely, as following a
similar case in Denmark recently, the government was forced to pay back more
than £275 million after the court ruled that charging on such subsidies
was illegal- Finance Minister Charlie McCreevy may be prevented from amending
the law to secure VAT payments on subsidies in the future. However, the Revenue Department
seems less than concerned at facing such a formidable foe, and is expectant
of success in the European courts. 'We are confident we can rebut any claims
in this regard,' a spokesman told the Irish Times this week. .
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