Vol. 440 No. 4
100 Mr. Yates asked the Minister for Finance the recent changes in VAT and stamp duty on transactions relating to commercial property whereby a purchaser of a lease or a property is now liable to additional costs arising out of a recent re-interpretation of the rules by the Revenue Commissioners; and the proposals, if any, he has in the Finance Bill to amend this so that there can be a reversion to the old system.
There has been no change in the Revenue Commissioners' practice in relation to the charging of stamp duty on transactions relating to commercial property which are subject to VAT. Stamp duty is levied on the total consideration paid in respect of a chargeable transaction. Where VAT is payable on a property transaction that is subject to stamp duty, the amount of VAT payable forms part of the consideration on which duty is levied.
While I am satisfied that the practice followed by Revenue is in accordance with the existing legislation, I am aware that the interaction of stamp duty and VAT has given rise to some difficulties and some uncertainty within the legal and acountancy professions. Accordingly, my Department and Revenue are reviewing the matter in the context of the forthcoming Finance Bill to see if legislative changes are required in this area.
