Dáil Éireann Debate, Tuesday - 22 October 2013
149. Deputy Michael McGrath asked the Minister for Finance if a transition period until 2018 will apply for companies that currently pay VAT in the UK and other jurisdictions under EU VAT rules on the cross border supply of services to private individuals and business customers that expire in 2015; the basis for the transition period; and the expected increase in VAT receipts to the Exchequer following the expiry of the EU VAT rules. [44641/13]
View answerI am informed by the Revenue Commissioners that at present the place of supply of telecommunications services, broadcasting services or electronic services to private individuals is the place where the supplier is established. From 2015, the supply of these services to private individuals will be taxed by reference to where the customers are located. The supplier would normally be obliged to register and pay VAT in all the Member States of their customers but, in order to reduce costs for business, a Mini One Stop Shop (MOSS) will be introduced that offers an alternative simplified process for charging and remitting VAT to the appropriate Member States. Under this regime, a supplier who has a place of supply or a fixed establishment in, say, Ireland, may register for VAT in Ireland and use the MOSS system to make a single return setting out his or her supplies to private individuals in other Member States. There is no transitional period for businesses involved in these supplies; the new legislation will apply from 1st January 2015. Member States will be allowed to retain a percentage of the VAT payments made through their MOSS system during the period 2015 – 2018. The retention percentage will be 30% of the VAT payments to be transferred to other Member States for 2015 and 2016, and 15% for 2017 and 2018.
Under the new regime Ireland will receive VAT revenues from supplies of telecommunications services, broadcasting services or electronic services to private individuals in the State from suppliers established in other Member States. On the other hand, Ireland will lose VAT revenues on similar supplies to private individuals in other Member States made by businesses established in the State. It is not possible to estimate the additional VAT revenues that will be collected in the State on the basis of the new regime. However, as the new regime will eliminate the existing incentive for businesses engaged in these supplies to establish in Member States with lower VAT rates, the effect is likely to be positive.
