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Irish Tour Operators Stand To Recoup VAT Payments

by Jason Gorringe, Tax-News.com, London

11 July 2007


The Irish Revenue Commission has announced that tour operators, who had previously been treated as exempt, may now be entitled to claim repayment of Irish VAT.

The Revenue's announcement was made in the light of a recent decision in principle by the Appeal Commissioner, which stated that Irish tour operators could reclaim VAT on their inputs in respect of their transport and accommodation services supplied outside of Ireland.

The Revenue explained that prior to 1979, tour operators were treated as carrying on qualifying activities, and were entitled to claim repayment of VAT on their inputs. Travel agents, however, were exempt, with no entitlement to claim such repayment. Following the transposition of the EU Sixth Directive into national law, Revenue and representatives of tour operators agreed that tour operators were to be treated in the same manner as travel agents with effect from 1 March 1979. Since then, tour operators have been treated as being exempt from VAT, and as such were not entitled to claim repayment of VAT on expenses.

However, the Revenue said that tour operators - including those established outside of the Irish State who supply accommodation services in Ireland - are no longer treated as carrying on exempt activities. Accordingly, such tour operators must register for VAT in respect of the accommodation services supplied in Ireland unless they are accounting for VAT on these services under the EU Special Scheme for travel agents in another Member State.

Claims to repayment of VAT are restricted to claims received within the statutory time limits: In the case of claims relating to taxable periods ending before 1 May 1998 the time limit is 10 years where the claim is made before 1 May 1999, and 6 years where the claim is made in the period from 1 May 1999 to 31 December 2004. Claims made on or after 1 January 2005 in respect of such taxable periods are statute barred.

In the case of claims relating to taxable periods ending on or after 1 May 1998 and before 1 May 2003, the time limit is 6 years where the claim is made before 1 January 2005, and 4 years where the claim is made on or after 1 January 2005. In the case of claims relating to taxable periods ending on or after 1 May 2003, the time limit is 4 years.


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