This section proposes to grant duty free stores to ships and boats of under 40 tonnes registered tonnage which make international sea voyages. Will the Minister clarify this?
SECTION 68.
Question proposed: "That section 68 stand part of the Bill."
It is a formalisation of registration. Under the Customs Consolidation Act, 1876, ships must be over 40 tonnes registered tonnage to qualify for duty free ship stores. This provision has effectively been relaxed for several years. The Revenue Commissioners have been allowing, on an administrative concession basis, boats under this weight limit to acquire duty free stores along with their other provisions from Irish suppliers when they make international sea voyages. It is bringing practice into line with the law.
What type of passenger ship would weigh less than 40 tonnes?
A large yacht.
Can yachts have duty free stores?
Yes.
Question put and agreed to.
Section 69 agreed to.
SECTION 70.
Acting Chairman
Amendments Nos. 87 and 88 are related and may be taken together, by agreement.
I move amendment No. 87:
In page 70, paragraph (b), line 5, to delete "subsection" and substitute "definition".
Amendment agreed to.
I move amendment No. 88:
In page 70, paragraph (b), line 7, to delete "subsection" and substitute "definition".
Amendment agreed to.
I move amendment No. 89:
In page 70, paragraph (b), line 12, after "subsection (1)(b)" to insert "of section 4".
Amendment agreed to.
Question proposed: "That section 70, as amended, stand part of the Bill."
This section imposes VAT on the surrender of immovable property. If a landlord pays a tenant to leave, is this prima faciesubject to VAT?
Yes. It would be subject to 12.5 per cent VAT. If one received £1,000 to quit one's premises in advance of the expiry of the lease, one would be liable to pay 12.5 per cent on it.
I presume the service would be the surrender of the tenancy and the service provider would be accountable.
A reverse charge would be paid by the landlord. The cost of surrendering would be increased accordingly.
Is this being done on foot of a directive?
The new provisions deal with VAT avoidance to exempt bodies taking out long term leases on commercial property and, in particular, the use of surrender or assignment of a lease as an avoidance mechanism. This is achieved by treating surrenders and assignments similarly to the creation of subleases which are fully taxable. A reverse charge mechanism is introduced to ensure the VAT charges collectible in all circumstances and the valuation rules are changed to close off the use of artificially low rents between connected entities for tax avoidance purposes.
Question put and agreed to.
Section 71 agreed to.
SECTION 72.
I move amendment No. 90:
In page 72, paragraph (d), line 47, after "supplying" to insert "goods of a kind referred to in paragraph (a) of the definition of ‘exempted activity' in section 1 or".
Section 74 amends section 7 of the VAT Act which deals with the waiving of an exemption from VAT and short term lettings of property. This amendment corrects a minor drafting error in the Bill as initiated.
Amendment agreed to.
Section 72, as amended, agreed to.
Section 73 agreed to.